Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2011 and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Department’s financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the Department’s Departmental Performance Report is consistent with these financial statements.
Management is also responsible for maintaining an effective system of internal control over financial reporting designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.
Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Department; and through conducting an annual assessment of the effectiveness of the system of internal control over financial reporting.
An assessment for the year ended March 31, 2011 was completed in accordance with the Policy on Internal Control and the results and action plans are summarized in the annex.
The system of internal control over financial reporting is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments. The effectiveness and adequacy of the Department’s system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the Department's operations, and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which recommends the financial statements to the Deputy Head of the Department.
The financial statements of the Department have not been audited.
Daniel Schnob
Chief Financial Officer
Myles J. Kirvan
Deputy Minister of Justice and Deputy Attorney General of Canada
Ottawa, Canada
August 31, 2011
Statement of Financial Position (unaudited)
As at March 31
(in thousands of dollars)
Assets | 2011 | 2010 |
| Financial assets |
| Due from the Consolidated Revenue Fund | 424,418 | 444,915 |
| Receivables and advances (Note 4) | 24,488 | 19,151 |
| Total financial assets | 448,906 | 464,066 |
| Non-financial assets |
| Prepaid expenses | 70 | 85 |
| Tangible capital assets (Note 5) | 43,916 | 40,282 |
| Total non-financial assets | 43,986 | 40,367 |
| Total | 492,892 | 504,433 |
Liabilities and Equity of Canada | Liabilities | 2011 | 2010 |
| Accounts payable and accrued liabilities (Note 6) | 63,667 | 70,284 |
| Family Law account (Note 7) | 4,962 | 6,578 |
| Transfer payments payable | 392,331 | 400,114 |
| Vacation pay and compensatory leave | 19,157 | 18,082 |
| Employee severance benefits (Note 8) | 91,517 | 90,297 |
| Total liabilities | 571,634 | 585,355 |
| Deficit of Canada | (78,742) | (80,922) |
| Total | 492,892 | 504,433 |
Contingent liabilities (Note 9)
Contractual obligations (Note 10)
The accompanying notes form an integral part of these financial statements.
Daniel Schnob
Chief Financial Officer
Myles J. Kirvan
Deputy Minister of Justice and Deputy Attorney General of Canada
Ottawa, Canada
August 31, 2011
Statement of Operations (unaudited)
For the year ended March 31
(in thousands of dollars) | 2011 | 2010 |
| Expenses |
| Services to government | 497,368 | 456,876 |
| Justice policies, laws and programs | 459,126 | 455,209 |
| The Office of the Federal Ombundsman for Victims of Crime | 1,394 | 1,353 |
| Internal Services | 169,107 | 161,923 |
| Total expenses | 1,126,995 | 1,075,361 |
| Revenues |
| Services to government | 298,300 | 240,723 |
| Justice policies, laws and programs | 8,464 | 8,603 |
| Internal Services | 30,882 | 21,622 |
| Total revenues | 337,646 | 270,948 |
| Net cost of operations | 789,349 | 804,413 |
The accompanying notes form an integral part of these financial statements.
Statement of Equity of Canada (unaudited)
For the year ended March 31
(in thousands of dollars) | 2011 | 2010 |
| Deficit of Canada, beginning of year | (80,922) | (107,914) |
| Net cost of operations | (789,349) | (804,413) |
| Change in due from the Consolidated Revenue Fund | (20,497) | 46,898 |
| Net cash provided by Government | 726,630 | 702,045 |
| Services provided without charge by other government departments (Note 11) | 85,396 | 82,462 |
| Deficit of Canada, end of year | (78,742) | (80,922) |
The accompanying notes form an integral part of these financial statements.
Statement of Cash Flow (unaudited)
For the year ended March 31
(in thousands of dollars) | Operating activities | 2011 | 2010 |
| Net cost of operations | 789,349 | 804,413 |
| Non-cash items |
| Amortization of tangible capital assets (Note 5) | (11,389) | (10,700) |
| Gain on disposal and transfer of capital assets | 11 | - |
| Services provided without charge by other government departments (Note 11) | (85,396) | (82,462) |
| Variations in Statement of Financial Position |
| Increase (decrease) in accounts receivable and advances | 5,337 | (540) |
| (Decrease) increase in prepaid expenses | (15) | 7 |
| Decrease (increase) in liabilities | 13,721 | (22,819) |
| Cash used by operating activities | 711,618 | 687,899 |
| Capital investment activities | 2011 | 2010 |
| Acquisitions of tangible capital assets (Note 5) | 15,023 | 14,146 |
| Proceeds from disposal of tangible capital assets | (11) | - |
| Cash used by capital investment activities | 15,012 | 14,146 |
| Net cash provided by Government | 726,630 | 702,045 |
The accompanying notes form an integral part of these financial statements.
FAQs
A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are ...
What is management's responsibility for internal financial controls? ›
In order to maintain effective internal controls, management should: Maintain adequate policies and procedures; Communicate these policies and procedures; and. Monitor compliance with policies and practices.
What is management responsibility for financial reporting? ›
Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Who is responsible for maintaining the company's internal control over financial reporting? ›
W Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting.
Who is responsible for the effectiveness of internal controls over financial reporting? ›
71. The auditor should form an opinion on the effectiveness of internal control over financial reporting by evaluating evidence obtained from all sources, including the auditor's testing of controls, misstatements detected during the financial statement audit, and any identified control deficiencies.
What is the internal control over financial reporting? ›
Internal control over financial reporting (ICFR or ICOFR) is a process consisting of policies and control procedures to assess financial statement risk and provide reasonable assurance that a company prepares reliable financial statements.
What are the responsibilities of management in internal control? ›
Managers and department heads are generally responsible for identifying potential risks, designing and implementing controls for their areas of responsibility, and keeping current with events and changes that affect the controls they have put into place.
What is the role of management in financial reporting? ›
Management is responsible for preparing the Consolidated Financial Statements. This responsibility includes selecting appropriate accounting policies and making estimates and other judgments consistent with International Financial Reporting Standards.
Who is responsible for overseeing the financial reporting process? ›
The audit committee is responsible for overseeing the financial reporting process. To do so effectively, committee members should be familiar with the processes and controls that management has established and determine whether they are designed and operating effectively.
What is the responsibility of financial reporting? ›
Financial reporting is the way businesses communicate financial data to external and internal stakeholders. External stakeholders — like regulatory agencies, current and potential shareholders and investors, and lenders — use financial reports to draw conclusions about a company's current and future financial health.
Responsibility for Internal Control
Management includes the manager, finance officer, department heads, or others with upper-level responsibilities. The management team must design and implement controls, as well as communicate internal control responsibilities to lower-level staff.
Who is ultimately responsible for a company's system of internal controls? ›
The board of directors is ultimately responsible for a company's system of internal control. It should set appropriate policies on internal control and seek regular assurance that the system is functioning effectively. It is the role of management to implement the board's policies on risk and control.
What is the difference between management control and internal control? ›
Although a company's accounts must be audited by an external institution, management control does not involve internal auditing and, by law, is not subject to external auditing. Internal control, on the other hand, focuses on the construction and analysis of the operational functioning of the company.
What are the responsibilities of management for internal financial controls? ›
Ensure the reliability and integrity of financial information - Internal controls ensure that management has accurate, timely and complete information, including accounting records, in order to plan, monitor and report business operations.
Who is primarily responsible for financial reporting? ›
Answer and Explanation:
Management is responsible for preparing and revealing the financial statements of the organization to the associated parties. Hence, the primary responsibility for the financial statements is on management.
What is management's report of internal control over financial reporting? ›
The internal control report must include: a statement of management's responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management's assessment of the effectiveness of the company's internal control over financial reporting as of the end of the company's ...
What is management's responsibility as it relates to internal controls? ›
Management is responsible for establishing and maintaining internal control to achieve the objectives of effective and efficient operations, reliable financial reporting, and compliance with applicable laws and regulations.
What are the internal controls of financial management? ›
Internal Controls
Internal control is a process of checks and balances designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting and compliance: Reliability of financial data - Financial information on reports should be accurate, reliable, and complete.
Who is ultimately responsible for a company's internal controls? ›
Managers often think of internal controls as the purview and responsibility of accountants and auditors. The fact is that management at all levels of an organization is responsible for ensuring that internal controls are set up, followed, and reviewed regularly.
