Definitions of Key Financial Terms

Financial Statements: are a set of reports prepared annually by an organization's management which present their financial position and results of operations at the end of their fiscal year.

Audited Financial Statements: are financial statements that have been audited by an independent external auditor. These include the financial statements and the accompanying auditor's report, which summarizes the "auditor's opinion".

Auditor's Opinions: provide reasonable, but not absolute, assurance that the financial statements have no material mistatements and that they have been prepared in accordance with Generally Accepted Accounting Principles (GAAP). An "unqualified opinion" means that no material misstatements have been identified by the auditor in the financial statements. A "qualified opinion" means that apart from issues identified by the auditor where deviations from GAAP have occurred, the financial statements present fairly the financial position and results of operations. The auditor may also issue an "adverse opinion", which means that the financial statements have been materially misstated or may issue a disclaimer of opinion, which means that there was insufficient appropriate supporting information to form an auditor's opinion.

External Audits: are carried out by an independent external auditor or by an agency of the Crown (for example, the Office of the Auditor General, the Commissioner of the Environment and Sustainable Development, the Public Service Commission). These audits may focus on financial information, such as the financial position of the department or on non-financial information, such as the administration of a program or service. The results of external audits are used to identify emerging issues and make recommendations to improve the efficiency and economy of departmental programs and services.

Internal Audits: are independent, objective, evidenced-based examinations of a department's management systems, processes, and practices. Their purpose is to provide the deputy head with assurance as to the design and operation of a department's governance, risk management and control processes. The results of internal audits are used to identify emerging issues and make recommendations for the improvement of departmental performance.

Recipient Audits: are assessments conducted by independent auditors to provide assurance in the form of an audit opinion on a recipient's compliance with the terms and conditions of a funding agreement administered by the department. The audit may address financial and/or non-financial aspects of the funding agreement, including the recipient's control activities in relation to funding received under the agreement.

Forensic Audits: are examinations conducted by a qualified independent auditor using specific auditing procedures designed to identify and gather evidence to support an assessment of possible irregularities, including the misappropriation of funds or assets, reported fraud or specific allegations on the part of a recipient or an individual.

Evaluations: are the systematic collection and analysis of evidence on the outcomes of programs to make judgments about their relevance, performance, and alternative ways to deliver them or to achieve the same results.

Compliance and Quality Management: refers to the suite of monitoring activities conducted by program management, both at a regional and national level, and by the Chief Financial Officer Sector to ensure ongoing recipient compliance with program terms and conditions identified in funding agreements administered by the department.