Responsibility for the Financial ReportResponsibility for the Financial Report

Responsibility for the Financial Report

42 While the auditor is responsible for forming and expressing an opinion on the financial report, the responsibility for the preparation and presentation of the financial report in accordance with the applicable financial reporting framework is that of those charged with governance of the entity.[9] Ordinarily, those charged with governance delegate certain tasks concerning the preparation and presentation of the financial report to management.[10] However, in such cases, those charged with governance are still ultimately responsible. The audit of the financial report does not relieve management or those charged with governance of their responsibilities.

43 The term “financial report” refers to a structured representation of the financial information, which ordinarily includes accompanying notes, derived from accounting records and intended to communicate an entity’s economic resources or obligations at a point in time or the changes therein for a period of time in accordance with a financial reporting framework. The term may refer to a complete financial report, but in some jurisdictions, it may also refer to a single financial statement, for example, a balance sheet, or a statement of revenues and expenses, and related explanatory notes.

44 The requirements of the financial reporting framework determine the form and content of the financial report and what constitutes a complete financial report. For certain financial reporting frameworks, a single financial statement, such as a cash flow statement and the related explanatory notes, constitutes a complete financial report. For example, the International Public Sector Accounting Standard (“IPSAS”), “Financial Reporting Under the Cash Basis of Accounting,” states that the primary financial statement is a statement of cash receipts and payments when a public sector entity prepares and presents its financial statements in accordance with that IPSAS. A financial report prepared by reference to Australian Accounting Standards, on the other hand, is intended to provide information about the financial position, performance and cash flows of an entity. A financial report as defined under sections 295 and 303 of the Corporations Act 2001 and AASB 101 Presentation of Financial Statements, consists of the financial statements for the year and the half-year respectively, notes to the financial statements and the directors' declaration about the statements and notes.

45 Those charged with governance are responsible for identifying the financial reporting framework to be used in the preparation and presentation of the financial report. Those charged with governance are also responsible for preparing and presenting the financial report in accordance with that applicable financial reporting framework. This responsibility includes: