Description: This past week the Province of New Brunswick released its financial statements, claiming that its deficit was lower than projected. The big problem though was that the Auditor General, Kim MacPherson, gave the Province a qualified audit opinion for the way it accounted for its so-called shared risk pension funds. And. in somewhat of a surprise move, the government sought out the media to try to promote its viewpoint as the correct one. If those inside government knew a bit of audit history, they might do well to reflect on a previous conflict between a 1960s federal Liberal government and then Auditor General Maxwell Henderson. Suffice it to say, things did not end well for the government in that particular episode.
Date: October 2, 2015
1) Who do you tend to believe in this battle of accountants?
2) From your knowledge of pension accounting rules, what treatment should the government adopt?
3) A public company with a qualified audit opinion would be delisted by securities regulators, but this is not the case for a government like New Brunswick. Do you think securities markets should take stronger action when a government does not have a clean audit opinion?