Determining if your association needs an audit can be straightforward when you know your annual revenue. According to the ACNC’s update, associations are classified as follows:
- Small Associations: Annual revenue under $500,000
- Medium Associations: Annual revenue of $500,000 or more, but under $3 million
- Large Associations: Annual revenue of $3 million or more
What Does This Mean for You?
- Small Associations (Under $500,000):
A full audit is generally not needed. A simpler financial review is usually enough to keep your accounts in check.
- Medium Associations ($500,000 to Under $3 Million):
With more money coming in, your association’s financial activities are more complex. A full audit is often recommended to ensure everything is transparent and correct.
- Large Associations ($3 Million or More):
For associations with high revenue, a full audit is typically required. This provides extra assurance to donors, members, and regulators that your financial statements are accurate.
Steps to Decide
- Check Your Revenue:
Look at your financial statements to find your total annual revenue.
- Match Your Revenue to the Categories:
If it’s under $500,000, a review might be enough.
If it’s $500,000 or more, think about a full audit.
If it’s $3 million or more, a full audit is usually necessary.
- Review Your Rules:
Read your association’s governing documents to see if there are any specific requirements about audits or reviews.
- Talk to a Professional:
Consult with a specialist at Francis A Jones to help decide the best option for your association.
Why It Matters
- Transparency:
Audits and reviews show donors and stakeholders that your association manages funds responsibly.
- Risk Management:
Regular checks help catch errors or issues early.
- Compliance:
Following these guidelines keeps your association in line with regulatory requirements.
If you would like to discuss your auditing needs in more detail, please contact Daniel and the FAJ audit team directly on 9335 5211 or at [email protected]
Related blogs:
Rotation of auditors
NFP annual reporting requirements
Author: Daniel Papaphotis
Email: [email protected]
