Alert: Budget Information in Public Sector Financial Statements

Alert: Budget Information in Public Sector Financial Statements

Budget information contained within financial statements prepared in accordance with Canadian Public Sector Accounting Standards (PSAS) cannot be marked as “unaudited”. While this has been common industry practice in the past, CPA Canada released guidance clarifying that marking budget information as "unaudited" is inappropriate when such information is required to be presented in the financial statements in accordance with the applicable accounting standards. The guidance is included within CPA Canada’s Reporting Implications of New Auditing and Accounting Standards publication (refer to Q&A 1(i)); click here to access the publication.

The Public Sector Accounting Handbook requires inclusion of budget information on the Statement of Operations and on the Statement of Change in Net Debt (PS 1201 Financial Statement Presentation para.130-.131). As this budget information is required by the applicable financial reporting framework, it does not represent supplementary information (i.e., information presented together with the financial statements that is not required by the applicable financial reporting framework, normally presented in either supplementary schedules or as additional notes).

CAS 700.A19 Forming an Opinion and Reporting on Financial Statements states that the auditor’s opinion covers a complete set of financial statements as defined by the applicable financial reporting framework. Accordingly, an auditor’s opinion would cover the budget information when such information is required to be presented in the financial statements. Marking this information as “unaudited” would, therefore, be inappropriate. If an auditor is unable to obtain sufficient appropriate audit evidence with respect to the budget information being fairly presented in accordance with PS 1201.130-.131, the auditor must refer to CAS 705 Modifications to the Opinion in the Independence Auditor’s Report to determine the implications to the audit opinion.

Other supplemental information included in schedules and appendices of public sector financial statements, which is not a requirement of the PSAS and is not subject to audit, should continue to be distinguished from the financial statements and marked as "unaudited".


This communication contains a general overview of the topic and is current as of June 3, 2014. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2014. All rights reserved.

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.