Commitments to the euro area's financial stability arrangements

The audit focused on reporting concerning financial liabilities incurred by the Finnish state as a result of the euro area’s financial stability arrangements in the Report on the Final Central Government Accounts. The main question was: Does Note 12 in the Report on the Final Central Government Accounts provide a true and fair view of the risks and binding character of exposures?

For an outsider looking at the final accounts to be able to form a true picture of the financial position of a reporting body, it is necessary to obtain information on risks and what steps have been taken to mitigate them.

In the opinion of the National Audit Office, the case of the EFSF shows that numerical data alone are not enough to provide true and fair information on the size and binding character of complicated financial liabilities.

The content of verbal information and the way in which it is presented should support information that is provided in table form, for example by describing the nature and binding character of exposures in a standardised way.

The text in the Report on the Final Central Government Accounts lacks a standardised description of risks, risk management principles, objectives and measuring methods as well as possible changes in them compared to the previous reporting period.

The National Audit Office supports making risk management principles in the Report on the Final Central Government Accounts transparent insofar as this is possible.

Note 12 alone does not provide a true and fair view of the riskiness and binding character of extremely complicated exposures; instead a verbal description is also needed in the text portion of the Report on the Final Central Government Accounts. Presenting information in verbal form is necessary at least whenever the size of a liability cannot be determined unambiguously or a numerical presentation in table form by itself does not provide an adequate picture of the complexity of a liability.