Nova Scotia first province to report Key Audit Matters in Auditor General report
KAM will provide Nova Scotians with context and transparency
HALIFAX, Feb. 26, 2021 – The Office of the Auditor General of Nova Scotia is marking a first for provincial legislative audit offices in Canada. Terry Spicer, Nova Scotia’s Acting Auditor General, has chosen to introduce Key Audit Matters in his August 2020 Independent Auditor’s Report on the Province’s Consolidated Financial Statements and in the Auditor General’s December 2020 Financial Report.
“Matters that are complex, have a high degree of uncertainty or are important to the public are highlighted as key audit matters,” says Spicer. “And it’s helpful to put them in context for the public because of the additional insight it provides into how important items were addressed by the Office during the audit.”
Under Canadian Auditing Standards, for periods ending on or after December 15, 2020, key audit matters are to be communicated for most audits of complete sets of general purpose financial statements of entities listed on the Toronto Stock Exchange (TSX). Public accounts do not fall under that requirement.
For 2019-20, the Key Audit Matters include major tax revenues; pension, retirement and other obligations; and liabilities for contaminated sites. By including the three KAMs in the report, auditors provide context for their work and transparency for the Nova Scotian public.
“Essentially, they are just complex matters to audit, so it helps the user understand that these are the tricky areas, not because they’re not accounted for properly but because the nature of these particular line items mean they need a little more attention,” says Spicer.
After further investigation, all three were properly presented in the Province’s Consolidated Financial Statements and were disclosed appropriately in accordance with Canadian public sector accounting standards. “It is quite clear that these are appropriately accounted for under the standards. It is all positive,” says Spicer.
As Key Audit Matters become a standard part of financial reporting for TSX listed entities and other listed entities worldwide, other legislative offices in Canada are starting to provide information on their key areas of focus in their year-end financial reports too. “You could potentially see some other jurisdictions going in the same direction in the future,” says Spicer.
Nova Scotia holds the distinction of being the first province in Canada to elect a representative assembly. Now, more than 250 years later, the provincial Office of the Auditor General has marked another Canadian first for the House.
Amy Pugsley Fraser is communications manager for the Office of the Auditor General of Nova Scotia. Photo of Nova Scotia Acting Auditor General Terry Spicer is courtesy of CBC Nova Scotia.