We provide independent, valued assurance and insights through our annual audits of Queensland's public sector and local government entities.

What is an audit?

As the independent auditor of the Queensland public sector, we provide professional audit services; give entities insights on their financial performance, risk and internal controls; and produce reports to parliament. 

Our financial audits examine an entity’s financial statements to ensure proper accounts have been kept, that they fairly present the entity’s financial performance and position, and they comply with relevant reporting requirements. Reliable financial statements help key stakeholders (for example, parliament and members of the general public) hold public sector entities accountable for the use of funds and assets available to them.

Financial statements show how the entity earned revenue and incurred expenses, and its assets and liabilities. You can learn more about reading financial statements in our blog Understanding general purpose financial statements.  

Our performance and assurance audits examine the efficiency, effectiveness, and economy of public service delivery. They assess if government is using public money well and meeting taxpayers’ expectations around service delivery.

Find out more about our work and how we conduct it; our products, recommendations and insights; and our role in our fact sheets.

What are audit opinions?

From our financial audits, we express an opinion on whether the entity gave a true and fair view of its financial performance and position at the end of the year. 

We express an unmodified opinion when the entity prepares its financial statements in accordance with relevant legislative requirements and Australian accounting standards.

We modify our audit opinion when the financial statements do not comply with relevant legislative requirements and Australian accounting standards and, as a result, are not accurate and reliable. There are 3 types of modified opinions:

  • qualified opinion – the financial statements as a whole comply with relevant accounting standards and legislative requirements, with the exceptions noted in the opinion
  • adverse opinion – the financial statements as a whole do not comply with relevant accounting standards and legislative requirements
  • disclaimer of opinion – the auditor is unable to express an opinion as to whether the financial statements comply with relevant accounting standards and legislative requirements.

Sometimes we include an emphasis of matter to highlight an issue the auditor believes the users of the financial statements need to be aware of. They help users better understand the financial statements. The inclusion of an emphasis of matter paragraph does not change the audit opinion.

How do we assess internal controls and financial reporting issues?

Internal controls are the people, systems, and processes that ensure an entity can achieve its objectives, prepare reliable financial reports, and comply with applicable laws. 

We assess and communicate internal control issues and financial reporting issues to entities during our financial audits. While we rate these issues based on their potential effect on the financial statements, we do not express an audit opinion on them. However, we do report on internal controls in our annual financial audit reports to parliament. 

You can learn more about internal controls and financial reporting issues, and our rating and assessment of them, here.

QAO has also recently developed a new assessment tool for internal controls, which will help us better communicate with our clients about the strength of their controls and areas they need to improve on. You can read more about this tool in our blog Our new annual assessment tool for internal controls is now available.

Terminology and glossary

Term Definition
Accountability The responsibility of public sector entities for achieving their objectives in an efficient, effective and economic manner and in compliance with applicable laws. They are also responsible for the appropriate use and safeguarding of their assets.
Appropriation An amount approved by parliament to fund the operations of government departments.
Audit committee

A committee intended to provide assistance to the accountable officer or statutory body in discharging their obligations. Duties and responsibilities can involve oversight of all or a combination of the following:

  • effectiveness and reliability of internal controls
  • quality and integrity of accounting and reporting practices
  • effectiveness of performance management
  • legal and regulatory compliance
  • work performed by external audit, including key findings and matters raised
  • performance of the internal audit function.
Australian accounting standards The rules by which financial statements are prepared in Australia. These standards ensure consistency in measuring and reporting on similar transactions.
Capital expenditure Expenditure to acquire or build assets or improve the service potential of existing assets that are capitalised to the balance sheet (which means that the cost of the asset can be allocated over the years for which the asset will be in use).
Capital project A single project, for example the construction of a new school. 
Capital program Several capital projects brought together under one program, for example the construction of several new roads in a particular area.
Depreciation The systematic allocation of a physical asset's value as an expense over its expected useful life, taking account of normal usage, obsolescence, or the passage of time.
Fair value The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties, in an arm’s length transaction.
Financial assets Cash and deposits, receivables and loans given, shares, and investments.
Going concern An entity that is a going concern is expected to be able to pay its debts as and when they fall due, and to continue to operate without any intention or necessity to liquidate or wind up its operations.
Government borrowings Monies received by the state from issuing bonds, with the agreement that the amounts borrowed will be repaid.
Misstatement The difference between the amount, classification, presentation, or disclosure of a reported financial report item and the amount, classification, presentation, or disclosure that is required for the item to be in accordance with the applicable financial reporting framework. Misstatements can arise from error or fraud.
Net assets Total assets less total liabilities.
Net debt Financial liabilities less financial assets.
Net financial worth Financial assets less liabilities.
Project summaries Prepared for any capital project delivered through a public–private partnership, summarising the key information of the project agreement.
Project validation reports Reports prepared to provide assurance to decision-makers regarding the anticipated scope, costs, risks, and delivery planning associated with the proposed investment for the given project.
Public–private partnerships Cooperative agreements generally entered into by private sector organisations with public sector entities for the delivery of government services.
Useful life The number of years an entity expects to use an asset (not the maximum period possible for the asset to exist).