Appointing an auditor or verifier
Your incorporated association's financial records must be audited or verified each financial year.
Whether you need to appoint a registered auditor or verifier to do this depends on your association's reporting level.
Incorporated association reporting levels
The 3 reporting levels are based on an association's size. Size is worked out by the value of an association's current assets and revenue:
- Large associations are those with current assets totalling more than $1 million or annual revenue more than $500,000.
- Medium associations have current assets totalling between $300,000 and/or $1 million, or annual revenue between $150,000 and $500,000.
- Small associations have current assets totalling less than $300,000 and annual revenue less than $150,000.
Your total revenue is your total income during the last financial year before any expenses are deducted.
Your current assets are any assets easily converted into cash, such as:
- cash, including in bank accounts
- shares
- accounts receivable
- short-term investments.
Property or any depreciable assets—for example, a car or machinery—aren't included in current assets.
Type of auditor or verifier you need to appoint
Large associations must appoint a certified accountant or registered auditor to audit their financial statements.
Medium associations must appoint a certified accountant or registered auditor or apply to appoint an approved person to audit or verify their financial statements.
Your medium association must have an audit if required under any law, including the Gaming Machine Act 1991—for example, if you have pokies. In all other cases verification is enough unless your members specifically want an audit.
Your auditor, accountant or approved person must view your financial statement and provide a signed written statement confirming they're satisfied with your financial statement. An example statement is:
I have examined the association's financial records and state that the association's financial records show the association has adequate bookkeeping processes in place to correctly record and explain transactions to enable a true and fair financial statement to be prepared.
Small associations must have an audit if required to under any law, including the Gaming Machine Act—for example, if you have pokies. In all other cases verification is enough unless your members specifically want an audit.
Your president or treasurer will need to verify your financial statements and provide this signed written statement:
The association's financial records show the association keeps adequate financial records that correctly record and explain transactions and enable a true and fair financial statement to be prepared.
Acceptable auditors
Registered auditor
A registered auditor can audit or verify your financial records if they hold a valid registration with the Australian Securities and Investments Commission (ASIC) as a company auditor under the Corporations Act 2001.
Certified accountant
Your accountant must be a certified member of one of the following organisations to be eligible to audit your financial records:
- CPA Australia—they will use the letters CPA or FCPA after their name
- Chartered Accountants Australia and New Zealand—using the letters CA or FCA
- the Institute of Public Accountants—using the letters MIPA or FIPA.
Another approved person
Medium or small associations that want someone else—other than a registered auditor or certified accountant—to audit or verify their financial records can fill out an application for approval of auditor or verifier (Form 21).
We'll only approve another person to audit or verify your records if we're satisfied with their experience, qualifications and insurance cover.
Ineligible auditors
Your auditor or verifier can't be:
- the secretary or a member of your management committee
- an employee of your association
- a business partner, employer or employee of a committee member
- a spouse or dependent of any of the above.