Not-for-profit businesses are businesses that are set up for a social or environmental cause rather than to make a profit. They are usually registered as charities, and there are over 56,000 registered charities in Australia. Not-for-profit businesses are important because they help to empower social and economic growth. However, they can sometimes be bogged down by tedious audits. To help with this issue, we thought it would be useful to put together a brief article about this subject. If this is something that you’re interested in learning more about, read on as we break down everything you need to know about audit requirements for not-for-profits.
ACNC registered charities that make more than $250,000 a year have to give the ACNC financial statements within six months of the end of the financial year. Companies that are limited by guarantee and registered with the ACNC only have to give the ACNC annual reports, not ASIC.
If your not-for-profit organization is grant-funded, you may be required to have your accounts audited annually by a registered company auditor. This would be regardless of your annual revenue.
If an organization has a requirement for an audit specified in their constitution or rules, they will need to have their accounts audited by a registered company auditor. This is regardless of the organization’s annual revenue.
State or Territory regulators require associations to provide an annual report which details the association’s financial activity. For associations registered with the ACNC, this requirement is reduced to only reporting to the ACNC. If an association is not registered with the ACNC, they are required to submit an annual statement and audited financial statement within six months of the end of the financial year.
In order to be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC), organisations must meet certain requirements. One of these requirements is that they must report to the ACNC annually. For charities based in the Australian Capital Territory (ACT), South Australia or Tasmania, this means reporting to both the ACNC and the relevant state regulator. Charities based in other jurisdictions must only report to the ACNC.
If you are incorporated in NSW, you will need to lodge a Summary of Financial Affairs with NSW Fair Trading. This must be done within one month of your AGM or within seven months of the end of your financial year, whichever is later. Tier 1 organisations, which are those with revenue exceeding $250,000 or current assets exceeding $500,000, must also provide audited financial statements
Organisations in Victoria that make less than $250,000 a year don’t have to report their finances to anyone. If they make between $250,000 and $1 million, they can choose to have their accounts reviewed or audited, but they don’t have to. If they make more than $1 million, they must have an audit and they have to give their financial statements to Consumer Affairs Victoria.
Companies in Queensland must submit an annual return and financial statements to the state government within one month of their annual general meeting (AGM). Financial statements must be either audited by a registered company auditor or verified by a certified accountant.
Incorporated associations in the Northern Territory must submit their financial statements to the AGM within 28 days. The audit requirements for these associations are less strict than in other states and are based on tiers.
We hope this article helps you gain a better understanding of the audit process for non-for-profit businesses. While it may seem complicated at first, the information above should help you navigate the audit requirements with ease.
If you’re looking for help with the audit process, then you’ve come to the right place. SMB Accounting is fast becoming one of the leaders in Australia when it comes to providing accounting services. As an accounting firm serving Brisbane, Sunshine Coast, and Fraser Coast, we help clients by providing business advice, taxation, and XERO/MYOB/Quickbooks consulting. Whenever you need help managing your income tax returns or keeping your finances in check, SMB Accounting is the one to call. Contact us today to get started.