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What type of work does the Auditor-General do?

what does the auditor do

All about the Controller and Auditor-General.

Under the Public Audit Act 2001, the Auditor-General carries out:

Under the Local Government Act 2002, the Auditor-General must audit every local authority's long-term plan .

The Auditor-General can also perform other auditing or assurance services at the request of a public entity, such as auditing financial information in a prospectus or giving assurance to a public entity about its purchasing or contracting procedures.

Annual audits

Annual audits are carried out in keeping with the Auditor-General's auditing standards, which incorporate the auditing standards of the New Zealand Institute of Chartered Accountants. Annual audits involve auditing the financial statements and other information (for example, performance information) that a public entity is required by Parliament to have audited.

In an annual audit, the auditor:

  • examines an entity's financial statements, performance information, and other information that must be audited;
  • assesses the results of that examination against a recognised framework (usually generally accepted accounting practice); and
  • forms and reports an audit opinion.

The audit involves gathering all the information and explanations needed to obtain reasonable assurance that financial statements and other information do not have material misstatements caused by fraud or error. The auditor also evaluates the overall adequacy of the presentation of information.

This audit of the annual financial statements and other information of every public entity results in two kinds of report. One is the audit report (including the audit opinion) that is included in the public entity's published annual report, and the other is a report to the entity's governing body and management on matters arising from the audit.

The audit report on a public entity's annual financial statements and other information gives readers information to help them understand the accuracy of those statements.

The report to the governing body and management of a public entity sets out the findings from the audit and draws attention to areas in the underlying environment, systems, and controls where the public entity is doing well or where recommendations for improvement have been made.

Most public entities provide their annual report to Parliament. However, in the case of local authorities, the annual report is for ratepayers and other residents, so that they can see how their local authority has managed the public resources for which it is accountable.

Performance audits

A performance audit examines one or more of the following aspects of a public entity's performance:

  • effectiveness and efficiency;
  • compliance with statutory obligations;
  • use of public resources;
  • probity; and
  • financial prudence.

The findings, conclusions, and recommendations from that examination are usually reported to Parliament.

There are two constraints on examining effectiveness and efficiency:

  • The effectiveness and efficiency of the Reserve Bank or a registered bank cannot be examined.
  • It is not the Auditor-General's role to question the policies of the Government or local authorities.

The Auditor-General's staff choose the issues to be examined by performance audits and other studies through an annual work planning process. This involves examining each sector, and identifying the main areas of actual and potential concern that would benefit from being examined by a performance audit or other special study. The Auditor-General's annual plan includes a list of proposed performance audits.


The Auditor-General can inquire into any matter relating to a public entity's use of resources.

In general, an inquiry involves:

  • looking into a matter of concern raised with the Auditor-General by a member of the public, a member of Parliament, the Government, or an organisation about a significant financial, accountability, or governance issue in a public entity; and/or
  • conducting a formal inquiry into, and reporting to Parliament on, a matter of high public interest.

The Auditor-General cannot be ordered

to conduct an inquiry. Before deciding on whether to go ahead with an inquiry, the Auditor-General considers whether the matter is within the Auditor-General's mandate under the Public Audit Act 2001, is of substance and relevant to the Auditor-General's role, and is reasonably recent. Other considerations are whether the person or entity requesting the inquiry has taken reasonable steps to resolve the matter with the entity concerned, and whether the Auditor-General has the staff and resources to look into the matter.

In conducting an inquiry, the Auditor-General is subject to the same two constraints that apply to a performance audit.

Many inquiries are conducted simply and at minimal cost, and are followed by a brief report to the person or entity who asked for the inquiry. However, other inquiries address complex matters and assume a high public profile. The Auditor-General has wide powers to request information, and decides what information to disclose or include in a report. The Auditor-General may, if the issues are significant, produce a public report that is presented to Parliament, a Minister, or a local authority and published on our website.

Local authorities' long-term plans

The Local Government Act 2002 requires the Auditor-General to audit every local authority's draft and final long-term plan.

Reports and assistance to others

Parliament and its committees

As well as reporting to Parliament on public entities' activities, the Auditor-General assists select committees and members of Parliament in their own related roles of holding to account each individual department, office of Parliament, Crown entity, State-owned enterprise, or other public entity.

This assistance will be for one or more of five purposes:

  • select committee examinations of Estimates;
  • select committee reviews of public entities' performance and current operations (called financial reviews);
  • select committee inquiries;
  • select committee consideration of the reports of the Auditor-General presented to Parliament; and
  • members of Parliament enquiries or requests made directly to the Auditor-General.

In the first four categories, assistance is provided usually as a witness, under the Standing Orders of the House of Representatives.

The Officers of Parliament Committee has approved a code of practice that provides guidance for managing each of the main ways in which the Auditor-General may interact with Parliament, its select committees, and members.

Public entities

As well as providing annual audit reports to all public entities, and performance audit reports about selected entities, the Auditor-General provides reports and assistance to central agencies (the Department of the Prime Minister and Cabinet, the State Services Commission, and the Treasury) on matters to do with financial management and accountability.

The Auditor-General also provides advice and assurance to public entities on a range of matters – for example, to government departments about government advertising and publicity.

Local authorities

As well as auditing local authorities' long-term plans, the Auditor-General is responsible for assuring local communities that their local authority (and any related subsidiary organisation) is operating and accounting for its activities and performance in the manner required.

As the auditor of all local authorities, the Auditor-General has a national perspective, and can:

  • conduct audits of, and provide reports to, individual local authorities that are supported by sector-wide knowledge; and
  • speak authoritatively on matters of financial management and accountability in local government.

The Auditor-General also has responsibilities under the Local Authorities (Members' Interests) Act 1968, which applies to local authorities and a range of statutory bodies. The Act:

  • regulates financial dealings between members and their local authority; and
  • precludes members from participating at meetings in matters in which they have a pecuniary interest.

Other stakeholders

The Auditor-General assists other stakeholders, such as professional and sector organisations, and overseas audit offices, on auditing, financial management, and accountability matters.

Page last updated: 2 March 2012

Category: Taxes

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