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Legislative Assembly for the ACT: 2003 Week 10 Hansard (25 September) . . Page.. 3675 ..

MR SMYTH (Leader of the Opposition) (10.49): I present the following report:

Public Accounts-Standing Committee-Review of Auditor-General's Report No 7 of 2002-Financial audits with years ending to 30 June 2002, dated 25 September 2003, together with a copy of the extracts of the relevant minutes of proceedings.

I seek leave to move a motion authorising the report for publication.

Leave granted.

MR SMYTH: I move:

That the report be authorised for publication.

Question resolved in the affirmative.

MR SMYTH: I move:

That the report be noted.

The Public Accounts Committee has examined the Auditor-General's report No 7 of 2002, financial audits with years ending to 30 June 2002. Members may recall that this is a most substantial report, running to more than 300 pages. In this report the auditor provides audit results for 58 agencies, plus detailed comments on such matters as the Treasury's actions in reviewing the Financial Management Act, the use by the Treasurer of the Treasurer's Advance, the use of the territory banking account, performance measures and the territory's financial statements. This is a most comprehensive report and has warranted careful consideration by our committee. In addition to our deliberations, we held two public hearings involving the Treasurer and then Auditor-General and their officers.

With so much subject matter to cover, I will be able to mention only the key issues that we have dealt with. The first matter relates to the qualification made by the auditor of the territory's financial statements. I should explain at this point what "qualification"means when used in this technical sense by an auditor or an accountant. As Mr Parkinson explained this matter to the committee: "A qualification is a sign that, in the professional judgment of the auditor, there is something in those financial statements that is potentially misleading."

As a committee we are concerned that the territory's financial statements were qualified by the auditor. This is a very serious matter, a point emphasised by the Auditor-General in evidence to our committee. As Mr Parkinson commented, auditors do not qualify financial statements lightly. I should also note that the matter that led to the Auditor-General qualifying the territory's financial statements is the subject of professional disagreement, at least within Australia. Irrespective of that disagreement, however, the outcome of the audit of the territory's financial statements was a qualified audit opinion, and this qualification will continue until this disagreement is resolved.

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