Annual Report for the year ended 30 June 2004
Part 2: Statement of responsibility and audit report (continued)
Audit New Zealand
Audit report to the readers of Ministry of Defence's financial statements for the year ended 30 June 2004
The Auditor-General is the auditor of Ministry of Defence (the Ministry). The Auditor-General has appointed me, C R Fabling, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements of the Ministry, on his behalf, for the year ended 30 June 2004.
Unqualified opinion
In our opinion the financial statements of the Ministry on pages 28 to 104 (part 3 and part 4):
- comply with generally accepted accounting practice in New Zealand; and
- fairly reflect:
- the Ministry's financial position as at 30 June 2004;
- the results of its operations and cash flows for the year ended on that date;
- its service performance achievements measured against the performance targets adopted for the year ended on that date; and
- the assets, liabilities, revenues, expenses, contingencies and commitments managed by the Ministry on behalf of the Crown for the year ended 30 June 2004.
The audit was completed on 22 September 2004, and is the date at which our opinion is expressed.
The basis of the opinion is explained below. In addition, we outline the responsibilities of the Secretary of Defence and the Auditor, and explain our independence.
Basis of opinion
We carried out the audit in accordance with the Auditor-General's Auditing Standards, which incorporate the New Zealand Auditing Standards.
We planned and performed our audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements did not have material misstatements, whether caused by fraud or error.
Material misstatements are differences or omissions of amounts and disclosures that would affect a reader's overall understanding of the financial statements. If we had found material misstatements that were not corrected, we would have referred to them in the opinion.
Our audit involved performing procedures to test the information presented in the financial statements. We assessed the results of those procedures in forming our opinion.
Audit procedures generally include:
- determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data;
- verifying samples of transactions and account balances;
- performing analyses to identify anomalies in the reported data;
- reviewing significant estimates and judgements made by the Secretary of Defence;
- confirming year-end balances;
- determining whether accounting policies are appropriate and consistently applied; and
- determining whether all financial statement disclosures are adequate.
We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements.
We evaluated the overall adequacy of the presentation of information in the financial statements. We obtained all the information and explanations we required to support the opinion above.
Responsibilities of the Secretary of Defence and the Auditor
The Secretary of Defence is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. Those financial statements must fairly reflect the financial position of the Ministry as at 30 June 2004. They must also fairly reflect the results of its operations and cash flows and service performance achievements for the year ended on that date. In addition, they must fairly reflect the assets, liabilities, revenues, expenses, contingencies and commitments managed by the Ministry on behalf of the Crown for the year ended 30 June 2004. The Secretary of Defence's responsibilities arise from the Public Finance Act 1989.
We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 38(1) of the Public Finance Act 1989.
Independence
When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.
A staff member of the Office of the Controller and Auditor-General is currently seconded to the Ministry of Defence as Project Manager: Defence Capability and Resourcing Review for the period from 20 January 2004 until 24 December 2004. In addition to the audit we have carried out an assignment in the area of tender process assurance, which is compatible with those independence requirements. Other than the audit, the secondment and this assignment, we have no relationship with or interests in the Ministry.
C R Fabling
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand
