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Chapter Five: Annual Accounts

Independent Auditors' Report to the Scottish Parliament and the Auditor General for Scotland

We have audited the financial statements on pages 41 to 57 under the Public Finance and Accountability (Scotland) Act 2000. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets, and in accordance with the accounting policies set out on pages 44 to 46.

This report is made solely to the Auditor General for Scotland, in accordance with sections 21 and 22 of the Public Finance and Accountability (Scotland) Act 2000. Our audit work has been undertaken so that we might state to this party those matters we are required to state in an auditor's report and for no other purpose. In accordance with the Statement of Responsibilities of Auditors and of Audited Bodies prepared by Audit Scotland, this report is also made to the Scottish Parliament, as a body. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Auditor General for Scotland, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Agency, the Chief Executive and Auditor

As described on page 35 the Agency and Chief Executive are responsible for the preparation of the financial statements and for ensuring the regularity of expenditure and receipts. The Agency and Chief Executive are also responsible for the preparation of the other contents of the Annual Report. Our responsibilities, as independent auditors, are established by the Public Finance and Accountability (Scotland) Act 2000 and the Code of Audit Practice approved by the Auditor General for Scotland, and guided by the auditing profession's ethical guidance.

We report our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Public Finance and Accountability (Scotland) Act 2000 and directions made thereunder by the Scottish Ministers and whether, in all material respects:

  • the expenditure and receipts shown in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers, the Budget (Scotland) Act covering the financial year and sections 4 to 7 of the Public Finance and Accountability (Scotland) Act 2000; and
  • the sums paid out of the Scottish Consolidated Fund for the purpose of meeting the expenditure shown in the financial statements were applied in accordance with section 65 of the Scotland Act 1998.

We also report if, in our opinion, the Foreword is not consistent with the financial statements, if the Agency has not kept proper accounting records, or if we have not received all the information and explanations we require for our audit.

We review whether the statement on pages 36 and 37 complies with the Scottish Executive guidance on statements on the system of internal control. We report if, in our opinion, the statement does not comply with the guidance, or if the statement is misleading or inconsistent with other information we are aware of from our audit. We are not required to consider whether the statement covers all risks and controls, or form an opinion on the effectiveness of the Agency's corporate governance procedures or its risk and control procedures.

We read the other information contained in the Annual Report, and consider whether it is consistent with the financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.