Preparers and users
The Treasury
As the Government’s principal economic and financial adviser, one of the Treasury’s key tasks is to prepare the financial statements of the Government.
The annual financial statements must be accompanied by a statement of responsibility signed by the Minister of Finance and the Secretary to the Treasury. In this statement the Treasury acknowledges its responsibility to:
- establish and maintain a system of internal control designed to provide reasonable assurance that the transactions recorded are within statutory authority and properly record the use of all public financial resources by the Government, and
- prepare the financial statements in accordance with GAAP.
In order to prepare the financial statements of the Government the Treasury needs reliable financial information prepared using consistent accounting policies from all entities whose financial statements are consolidated in the financial statements of the Government. The Act therefore gives the Secretary to the Treasury the power to:
- request information required by the Treasury or the Minister for the preparation of the financial statements (section 29A), and
- issue Treasury Instructions regarding matters such as accounting policies, financial statement representations, and the form in which information is to be provided (section 80).
Minister of Finance
The Minister of Finance is responsible that the financial statements fairly reflect the financial position and operations of the Government for a given year. In the statement of responsibility the Minister of Finance acknowledges responsibility for the integrity of the financial statements and states that the financial statements fairly reflect the consolidated financial position and operations of the Government reporting entity for the reporting period.
Auditor-General
The Auditor-General is responsible for expressing an independent opinion on the annual financial statements and reporting that opinion to Parliament and other users of the financial statements. The independence of the Auditor-General, as an Officer of Parliament, enhances the integrity of the financial statements.
The auditor forms an opinion as to whether the financial statements:
- comply with generally accepted accounting practice in New Zealand, and
- fairly reflect the financial position of the reporting entity as at the balance date and the results of its operations and cash flows for the year ended on that date.
The auditor plans and performs the audit so as to obtain reasonable assurance that the financial statements do not have material misstatements, whether caused by fraud or error.
House of Representatives
Each year, as part of its financial review process, the Finance and Expenditure Committee scrutinises the financial statements of the Government and reports back to the House of Representatives on those statements. The allocation of the financial statements of individual public sector entities to select committees is made by the Finance and Expenditure Committee in accordance with the Standing Orders of the House of Representatives.
Parliament grants authority to the Government to use resources (refer Chapter 2) and to tax. It is therefore important that the Government reports to Parliament on its expenses and revenue during the period, on whether it has achieved its financial objectives, and on how assets and liabilities have been administered.
Other users: media, economists and rating agencies
The financial media, economists and rating agencies analyse and spread information to other users that are interested in New Zealand’s economic and fiscal performance.
The Government obtains finance from national and international capital markets by issuing financial instruments such as Government Stock and Treasury Bills. Rating agencies assess the Government’s creditworthiness for the capital markets. Rating agencies are primarily concerned with a government’s ability to service debt and to repay that debt when it falls due.
