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detect a material misstatement when it exists. Misstatements

are differences or omissions of amounts or disclosures, and

can arise from fraud or error. Misstatements are considered

material if, individually or in the aggregate, they could

reasonably be expected to influence the decisions of readers,

taken on the basis of these financial statements and the

performance information.

For the budget information reported in the financial statements

and the performance information, our procedures were limited

to checking that the information agreed to the Board’s and

Group’s statement of performance expectations.

We did not evaluate the security and controls over the

electronic publication of the financial statements and the

performance information.

As part of an audit in accordance with the Auditor-General’s

Auditing Standards, we exercise professional judgement and

maintain professional scepticism throughout the audit. Also:

We identify and assess the risks of material misstatement

of the financial statements and the performance

information, whether due to fraud or error, design and

perform audit procedures responsive to those risks, and

obtain audit evidence that is sufficient and appropriate to

provide a basis for our opinion. The risk of not detecting

a material misstatement resulting from fraud is higher

A member firm of Ernst & Young Global Limited than for

one resulting from error, as fraud may involve collusion,

forgery, intentional omissions, misrepresentations, or the

override of internal control.

We obtain an understanding of internal control relevant

to the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the

Board’s and Group’s internal control.

We evaluate the appropriateness of accounting policies

used and the reasonableness of accounting estimates and

related disclosures made by the Board members.

We evaluate the appropriateness of the reported

performance information within the Board’s and Group’s

framework for reporting its performance.

We conclude on the appropriateness of the use of the

going concern basis of accounting by the Board members

and, based on the audit evidence obtained, whether a

material uncertainty exists related to events or conditions

that may cast significant doubt on the Board’s and Group’s

ability to continue as a going concern. If we conclude that

a material uncertainty exists, we are required to draw

attention in our auditor’s report to the related disclosures

in the financial statements and the performance

information or, if such disclosures are inadequate, to

modify our opinion. Our conclusions are based on the

audit evidence obtained up to the date of our auditor’s

report. However, future events or conditions may cause

the Board and Group to cease to continue as a going

concern.

We evaluate the overall presentation, structure and

content of the financial statements and the performance

information, including the disclosures, and whether the

financial statements and the performance information

represent the underlying transactions and events in a

manner that achieves fair presentation.

We obtain sufficient appropriate audit evidence regarding

the financial statements and the performance information

of the entities or business activities within the Board

and Group to express an opinion on the consolidated

financial statements and the consolidated performance

information. We are responsible for the direction,

supervision and performance of the Board and Group

audit. We remain solely responsible for our audit opinion.

We communicate with the Board members regarding, among

other matters, the planned scope and timing of the audit and

significant audit findings, including any significant deficiencies

in internal control that we identify during our audit.

Our responsibilities arise from the Public Audit Act 2001.

Other information

The Board members are responsible for the other information.

The other information comprises the information included on

pages 1 to 17, 40 to 44, and 74 to 75 but does not include the

financial statements and the performance information, and our

auditor’s report thereon.

Our opinion on the financial statements and the performance

information does not cover the other information and we do

not express any form of audit opinion or assurance conclusion

thereon.

In connection with our audit of the financial statements and

the performance information, our responsibility is to read

the other information. In doing so, we consider whether the

other information is materially inconsistent with the financial

statements and the performance information or our knowledge

obtained in the audit, or otherwise appears to be materially

misstated. If, based on our work, we conclude that there is

a material misstatement of this other information, we are

required to report that fact. We have nothing to report in this

regard.

Independence

We are independent of the Board and Group in accordance

with the independence requirements of the Auditor-General’s

Auditing Standards, which incorporate the independence

requirements of Professional and Ethical Standard 1 (Revised):

Code of Ethics for Assurance Practitioners

issued by the New

Zealand Auditing and Assurance Standards Board.

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

in the Board and Group.

Stuart Mutch

Ernst & Young

On behalf of the Auditor-General

Wellington, New Zealand

77