Annual Report 2005

Audit report

To the readers of the Inland Revenue Department's Financial Statements for the year ended 30 June 2005

The Auditor-General is the auditor of the Inland Revenue Department (the Department). The Auditor-General has appointed me, H C Lim, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements of the Department, on his behalf, for the year ended 30 June 2005.

Unqualified opinion

In our opinion the financial statements of the Department comprising:

• Our Charter Commitments
• Statement of Service Performance
• Departmental Financial Statements - Statement of Accounting Policies, Statement of Financial Performance, Statement of Movements in Equity, Statement of Financial Position, Statement of Cash Flows, Statement of Commitments, Statement of Contingent Assets, Statement of Contingent Liabilities, Statement of Unappropriated Departmental Expenditure, Statement of Departmental Expenditure and Appropriations, Statement of Trust Monies and Notes to the Financial Statements, Summary of Departmental Financial results
• Financial Schedules for Administered Accounts - Crown - Statement of Accounting Policies, Schedule of Revenue - Crown as administered by Inland Revenue, Schedule of Expenditure - Crown as administered by Inland Revenue, Schedule of Assets - Crown as administered by Inland Revenue, Schedule of Liabilities - Crown as administered by Inland Revenue, Schedule of Movements in Equity - Crown as administered by Inland Revenue, Schedule of Cash Flows from Operating Activities - Crown as administered by Inland Revenue, Schedule of Cash Flows from Investing Activities - Crown as administered by Inland Revenue, Schedule of Cash Flows from financing Activities - Crown as administered by Inland Revenue, Schedule of Cash Flows Movement - Crown as administered by Inland Revenue, Schedule of Operating Surplus to Operating Cash Flows - Crown as administered by Inland Revenue, Schedule of Contingent Liabilities - Crown as administered by Inland Revenue, Schedule Accident Compensation Collections - Crown as administered by Inland Revenue, Schedule of Student Loan Movements - Crown as administered by Inland Revenue, and Notes to the Crown Financial Schedules
  • comply with generally accepted accounting practice in New Zealand; and
  • fairly reflect:
    • the Department's financial position as at 30 June 2005;
    • 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, commitments and trust monies managed by the Department on behalf of the Crown for the year ended 30 June 2005.

The audit was completed on 30 September 2005, and this is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Chief Executive 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 the 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 our opinion.

The 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 Chief Executive;
• 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 our opinion above.

Responsibilities of the Chief Executive and the Auditor

The Chief Executive 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 Department as at 30 June 2005. 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, commitments and trust monies managed by the Department on behalf of the Crown for the year ended 30 June 2005. The Chief Executive'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 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.

Other than the audit, we have no relationship with or interests in the Department.

H C Lim
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand

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Date published: 11 Oct 2005

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