Thank you, Mr. Chairman.
It's a pleasure for me and my colleague, Mr. Matthews, assistant comptroller general, to appear before you today and talk about some important policy changes affecting financial management.
Earlier this year, the Treasury Board approved the policy on financial reporting, information, and resource management. That policy completed the update of the financial management policy suite, the other elements of which are the financial management policy framework, the policy on internal control, the policy on financial management and governance, and the policy on financial management systems. Related to the financial management policy suite are the transfer payments policy and the policy on internal audit, which have also recently been updated.
The policy on financial reporting, information, and resource management establishes the requirement for departments to be capable of producing financial statements that can withstand a controls-based audit, but it does not establish a requirement that these financial statements be audited annually as a matter of course. Rather, the decision on whether an audit is required, either in whole or in part, will be left up to the Comptroller General. This policy modifies the intentions stated in 2004 to have all departments produce audited financial statements, which would be over and above the audit opinion already obtained on the consolidated financial statements of the Government of Canada.
The environment of 2010 is different from that of 2004 in a number of important ways. It was appropriate for the government to re-evaluate the merits of the earlier plan in that light. One needs to appreciate that a program of annual audits of financial statements for all departments would be costly, both for the departments themselves and for the Office of the Auditor General. Accordingly, one needs to weigh those costs against the benefits that would arise from such audits. That means recognizing in what ways audits provide assurance and, equally importantly, in what ways they do not.
I hope that during the course of today's discussion I will be able to explain a number of the benefits we expect to accrue from the collection of policies I cited a moment ago, and to explain how, with those policies now in place, the need for audits to serve as a catalyst for those same benefits is much reduced.
Thank you, Mr. Chairman.