Most Not-for-Profit Entities are registered with the ACNC, which, in addition to the rules of each entity, prescribes audit requirements for those entities.
An association may still require an audit, and this requirement would normally be specified in the rules. It is within the power of the members to pass a resolution that the accounts for a particular financial year be audited, especially if they have any reason to be concerned. Funding body agreements might also require the association’s accounts to be audited to ensure that the funds provided are used according to the funding agreement and for the purpose stated in the agreement.
The ACNC audit requirement is based on each entity’s turnover and classification as small, medium, or large.
A Tier 1 association is not required to complete an audit or review of its accounts unless:
All Tier 2 associations must have their financial reports reviewed. The process of reviewing an association’s accounts is not as detailed as the process of completing an audit. A reviewer will look over the association’s financial report and provide a statement on whether anything has come to their attention that might suggest that the association’s report does not comply with the requirements of the Act. In comparison, an auditor must collect evidence relating to the association’s financial records and transactions to satisfy themselves that the report is a true and correct reflection of the association’s finances. This enables them to provide a formal opinion on whether the accounts meet the relevant legal requirements.
The Act requires all Tier 3 associations to ensure their annual financial report is audited, and that a copy of the audit report is presented to members at each annual general meeting.
If you’re in need of an auditor, please get in touch with us on (03) 9431 1827.
