ENG-1993 — Page 49

CONSTITUTION AND ADMINISTRATION

32

Government auditing practised in Hong Kong falls into two main categories, termed 'regularity' audit and 'value-for-money' audit, respectively. The regularity audit, which is intended to provide an overall assurance of the general accuracy and propriety of the financial and accounting transactions of the government and other audited bodies, is carried out by means of selective test checks and reviews designed to indicate possible areas of weakness. The audit is designed to ensure, as far as reasonably possible, that the accounts are properly presented or give a true and fair view of the state of affairs, although, with the considerable volume and variety of government revenue and expenditure, it cannot be expected to disclose every accounting error or financial irregularity. Value- for-money audit is carried out according to guidelines tabled in the Legislative Council by the chairman of the Public Accounts Committee in 1986. The audit is intended to provide independent information, advice and assurance about the economy, efficiency and effectiveness with which any branch, department, agency, other public body, public office, or audited organisation has discharged its functions. This involves going beyond the normal accounting records. In line with contemporary developments in both government and commercial auditing elsewhere, it is also becoming increasingly relevant to ascertain whether efficient and economical practices are being followed in pursuing prescribed goals and whether these goals are being achieved.

The Director of Audit's report, after it has been submitted to the President of the Legislative Council and laid before the council, is considered by the Public Accounts -Committee. In 1993, the Director submitted two reports. The first report was tabled on April 28, covering the results of value-for-money audits completed, and the second report on November 17, covering the audit certification of the government's accounts for the preceding financial year, as well as the results of value-for-money audits completed.

The Director's reports on the accounts of other public bodies are submitted to the relevant authority, in accordance with the legislation governing the operation of these bodies.

Foreign Relations

The Role of the British Government

Because of Hong Kong's status as a dependent territory, the Secretary of State for Foreign and Commonwealth Affairs is constitutionally responsible to the British Parliament for the actions of the Hong Kong Government and he has authority to give directions to the Governor of Hong Kong. In practice, however, such formal directions have not been issued in living memory, and Hong Kong conducts its affairs with a high degree of autonomy in all domestic matters.

The relationship between London and Hong Kong is essentially one of co-operation. One important task regularly undertaken by the Foreign and Commonwealth Office is to ensure that Hong Kong's interests and views (which are not always identical to those of the United Kingdom) are properly considered within the British Government machinery, particularly when new policies are being formulated by other Whitehall departments.

Hong Kong's foreign relations are constitutionally the direct responsibility of the British Government. The British Government is internationally responsible for ensuring that the Hong Kong Government fulfils its obligations under the many international conventions and agreements which extend to Hong Kong, as well as to the United Kingdom. But in the day-to-day conduct of external affairs, Hong Kong in practice enjoys a considerable degree