Financial Audits

Financial audits answer this question: Is the government keeping proper accounts and records, and presenting its financial information fairly?

The Office of the Auditor General of Canada audits the federal government’s summary financial statements, which are published annually in the Public Accounts of Canada, and also audits those of Canada’s three Territories. The Auditor General provides an opinion as to whether the summary financial statements of the federal and territorial governments are fairly presented in accordance with their stated accounting policies.

The Office also conducts an annual audit of the financial statements of most Crown corporations and many federal organizations.

Financial audits of the federal government are similar to those done in the private sector, except that they have two additional components. First, they include an opinion on whether transactions examined by the auditors conform to laws and regulations. This tells Parliament whether the organization complied with authorities. Second, the Auditor General can report on any other matters she thinks should be brought to the attention of Parliament.

In financial audits, auditors test whether financial transactions support the amounts and disclosures in the financial statements. Audit procedures may include comparing the results of operations with planned results, assessing the reliability of a department’s financial control systems, and checking samples of transactions and balances. Auditors supplement these audit tests with further analysis and discussions with management.