Annual Audit Manual
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11021 Historical context of “other matters”
Oct-2012
In This Section
Overview
This section explains:
- The historical context of “Other matters”
OAG Guidance
Canada’s first Crown corporations came into being before Confederation, but it was not until the introduction of the Financial Administration Act (FAA) in 1951 that efforts were made to make these entities more accountable to Parliament. The FAA provided for each Crown corporation’s annual report to be submitted to the responsible minister and to Parliament, and for its financial statements to be published as part of the government’s annual Public Accounts reports.
The Act also required each Crown corporation’s auditor to “call attention to any other matter falling within the scope of his examinations that in his opinion should be brought to the attention of Parliament.” This requirement added an important legislative audit component to the scope of the traditional financial statement audit which remains intact today.
The value and importance of the “other matters” reporting mandate was made particularly clear when questionable business practices were unearthed in two Crown corporations in the mid-1970s. In one case, the concerns of the Auditor General were reported to the Corporation’s Board of Directors but not to Parliament, and the Office was subsequently criticized for its failure to do so.
Reporting such matters only to the audit committee or Board of Directors was not considered by Parliamentarians to be an appropriate option, given the Auditor General’s mandate to bring “other matters” like this to the attention of Parliament.
Today, a mandate specifically referring to “other matters” exists only for Crown corporations and territorial legislatures and entities. An “other matter” may also be reported initially using Sections 6 and/or 7 of the Auditor General Act (AG Act). That approach might be employed where an “other matter” was identified that the Office felt needed to be brought to the attention of Parliament as quickly as possible. The decision as to the most appropriate initial reporting vehicle would be based on the significance and time sensitivity of the matter.
However, as legislative auditors we are expected to report matters identified during the course of our work that we believe should be brought to the attention of Parliament. When such matters come to our attention during the conduct of an annual audit, we normally use our Auditor’s Report as the initial reporting vehicle.
That approach ensures that Parliamentarians receive the views of the Auditor General at the same time they receive the audited financial statements of the entity in question. It also ensures that the Office reports “other matters” consistently in all annual audits, regardless of the type of the entity being audited. The manner in which we report “other matters” is also consistent with Canadian auditing standards.