Audit opinions on accrual-based central government financial statements

This study examined the audit opinions on the accrual-based financial statements of six leading Western countries: the US, the UK, France, Australia, Canada, and New Zealand. While these countries are recognized as global leaders in public financial management, this study shows that they still face substantial challenges in producing financial statements that meet the criteria for unmodified audit opinions. The prevalence of modified audit opinions in central government financial statements differs from the private sector, where modified audit opinions are relatively rare. The analysis of modified audit opinions reveals that the most common issues concerned the boundaries of the reporting entity, inconsistent accounting policies, deficiencies in asset and liability recognition and measurement, and insufficient audit evidence, especially in areas involving military operations and infrastructure. This study highlights both the progress and the continuing challenges of implementing accrual-based financial reporting at the central government level.