Reserve Bank of Australia Annual Report – 2006 Financial Statements Independent Audit Report

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INDEPENDENT AUDIT REPORT

To the Treasurer

Matters relating to the Electronic Presentation of the Audited Financial Statements

This audit report relates to the financial statements published in both the annual report and on the website of the Reserve Bank of Australia (the Bank) and the consolidated entity for the year ended 30 June 2006. The Directors are responsible for the integrity of both the annual report and its web site.

The audit report refers only to the financial statements, schedules and notes named below. It does not provide an opinion on any other information which may have been hyperlinked to/from the audited financial statements.

If the users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial statements in the Bank's annual report.

Scope

The financial statements and Directors’ responsibility

The financial statements comprise:

  • Directors' Statement;
  • Balance Sheet, Income Statement, Statement of Distribution, Statement of Changes in Capital and Reserves, and Cash Flow Statement; and
  • Notes to and forming part of the Financial Statements

for both the Reserve Bank of Australia (the Bank) and the consolidated entity for the year ended 30 June 2006. The consolidated entity comprises both the Bank and the entities it controlled during that year.

The members of the Bank's Board are responsible for preparing the financial statements that give a true and fair view of the financial position and performance of the Bank and the consolidated entity, and that comply with Finance Minister's Orders made under the Commonwealth Authorities and Companies Act 1997, Australian Accounting Standards and other mandatory financial reporting requirements. The members of the Bank's Board are also responsible for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial statements.

Audit Approach

I have conducted an independent audit of the financial statements in order to express an opinion on them to you. My audit has been conducted in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing and Assurance Standards, in order to provide reasonable assurance as to whether the financial statements are free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive, rather than conclusive, evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

While the effectiveness of management's internal controls over financial reporting was considered when determining the nature and extent of audit procedures, the audit was not designed to provide assurance on internal controls.

I have performed procedures to assess whether in all material respects the financial statements present fairly, in accordance with Finance Minister's Orders made under the Commonwealth Authorities and Companies Act 1997, Australian Accounting Standards and other mandatory financial reporting requirements, a view which is consistent with my understanding of the Bank's and the consolidated entity's financial position and of their performance as represented by the results of their operations, changes in equity and cash flows.

The audit opinion is formed on the basis of these procedures, which included:

  • examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial statements; and
  • assessing the appropriateness of the accounting policies and disclosures used, and the reasonableness of significant accounting estimates made by the Board.

Independence

In conducting the audit, I have followed the independence requirements of the Australian National Audit Office, which incorporate the ethical requirements of the Australian accounting profession.

Audit Opinion

In my opinion, the financial statements of the Reserve Bank of Australia and the consolidated entity:

  1. have been prepared in accordance with Finance Minister's Orders made under the Commonwealth Authorities and Companies Act 1997; and
  2. give a true and fair view of the Reserve Bank of Australia's and the consolidated entity's financial position as at 30 June 2006 and of their performance for the year then ended, in accordance with:
    1. the matters required by the Finance Minister's Orders; and
    2. applicable Accounting Standards in Australia and other mandatory financial reporting requirements.
Signature of Ian McPhee, Auditor General, Australian National Audit Office

Ian McPhee
Auditor-General

Sydney
10 August 2006

GPO Box 707 CANBERRA ACT 2601
Centenary House
19 National Circuit BARTON ACT
Phone (02) 6203 7500 Fax (02) 6273 5355
Email ian.mcphee@anao.gov.au