1.1 Review of the 2002-03 Year

1.101
Local authority annual reporting and audit engagements for 2002-03 were conducted against a background of significant change and some uncertainty:

• the Local Government (Rating) Act 2002 came fully into effect for the 2003-04 rating year;
• a number of the provisions of the Local Government Act 2002 came into effect during this period and, in particular, nine local authorities elected to prepare a long-term council community plan (LTCCP) for 2003-13; and
• the likely significant future effect of the transition to standards based on International Financial Reporting Standards (IFRS) began to emerge.

1.102
Against this backdrop, the overall timeliness of local authority reporting did not show any overall improvement from the previous year (see pages 16-17).

1.103
Other matters to affect the 2002-03 audit round were:

• new financial reporting standards dealing with subsidiaries and associates;
• continuing issues related to the requirements of Financial Reporting Standard No. 3: Accounting for Property, Plant and Equipment (FRS-3) that local authorities value and include heritage collections in their financial statements; and
• ongoing issues relating to valuation of property, plant and equipment, and the inclusion of land under roads as a requirement of FRS-3 (see page 22).