Overview

This Section describes some of the special circumstances that may apply to the audits of public sector entities undertaken by legislative and other external auditors..

Legislatures and other elected or appointed governing bodies provide authority for the acquisition and use of financial resources and are responsible for overseeing their administration. Management is responsible for the administration of the financial affairs and resources of an entity and is accountable for its administration to the governing body and the public it represents.  In the federal and provincial governments, management consists of the executive (i.e., Cabinet) and appointed officials (for example, Deputy Ministers and Assistant Deputy Ministers). Similarly, in local governments, management consists of various combinations of elected and appointed officials.

Management is responsible for planning, directing and controlling operations and prepares reports, including financial statements, to provide an accounting of its administration. Responsibilities of management include measuring the effectiveness of programs, directing operations and activities with due regard for economy and efficiency, maintaining adequate systems of control, ensuring compliance with applicable authorities, selecting and applying appropriate accounting policies, and safeguarding assets.

To the extent required by their mandates, auditors assist legislatures and other governing bodies to fulfill their responsibility by providing assurance as to the credibility of management reports, assessments of various administrative practices and other information. For example, auditors examine financial statements to provide assurance to legislatures and other governing bodies as to the fairness of such statements. In order to discharge their responsibilities, auditors must be independent from those they audit. They also must have qualified audit personnel under their direction and access to all information relevant to the terms of their mandate. This imposes a responsibility on auditors to respect the nature of confidential or sensitive information that comes to their attention, to carry out their work efficiently and to report on a timely basis.