KU Annual Report 2007 - Page 18

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KU CHILDREN’S SERVICES We have audited the accompanying financial report of KU Children’s Services, which comprises the balance sheet as at 31 December 2007, and the income statement, cash flow statement and statement of recognised income and expense for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration as set out on pages 20 to 35. In addition, we have audited KU Children’s Services compliance with specific requirements of the Charitable Fundraising Act 1991 f o r t h e y e a r e n d e d 31 December 2007. Directors’ Responsibility for the Financial Report and Compliance with the Charitable Fundraising Act 1991 The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for compliance with the Charitable Fundraising Act 1991. This responsibility includes establishing and maintaining internal control relevant to compliance with requirements of the Charitable Fundraising Act 1991 and the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting 18 KU’s 112 th Annual Report 2007 policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility Our responsibility is to express an opinion on the company’s compliance with specific requirements of the Charitable Fundraising Act 1991 and the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the company has complied with specific requirements of the Charitable Fundraising Act 1991 and the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the company’s compliance with specific requirements of the Charitable Fundraising Act 1991 a n d amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of non-compliance with specific requirements of the Charitable Fundraising Act 1991 and material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s compliance with the Charitable Fundraising Act 1991 and preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Inherent Limitations Because of the inherent limitations of any compliance procedure, it is possible that fraud, error, or non-compliance with the Charitable Fundraising Act 1991 may occur and not be detected. An audit is not designed to detect all weaknesses in KU Children’s Services’ compliance with the Charitable Fundraising Act 1991 as an audit is not performed continuously throughout the period and the tests are performed on a sample basis. Any projection of the evaluation of compliance with the Charitable Fundraising Act 1991 to future periods is subject to the risk that the procedures, may become inadequate because of changes in conditions, or that the degree of compliance with them may deteriorate. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.