Charity reporting to become more transparent
In a press release a few days ago, Minister of Commerce Craig Foss and Community and Voluntary Sector Minister Jo Goodhew outlined some changes to registered charities' financial reporting.
All registered charities must file an Annual Return with Charities services, and attach a copy of their financial statements. Financial statements submitted with charities' Annual Returns are published on the Charities Register, and are available for the public to view. This won't change.
What will change?
The changes are for charities that are not already required by their rules document to get their financial statements audited or reviewed…
Charities with annual expenditure:
- of $1 million or more - financial statements must be audited by a qualified accountant
- between $500,000 and $1 million - financial statements must be reviewed by a qualified accountant
- less than $500,000 - can choose to have their financial statements reviewed or audited, or not
When will the changes take effect?
It is expected the changes will take effect for charities' financial years starting on or after 1 April 2015, but charities that don't currently have a requirement to get their accounts audited or reviewed can opt to have their accounts audited or reviewed if they wish.
"These changes will improve the quality of financial reporting among charities and result in greater confidence that financial statements are reliable," says Mr Foss.
"The new requirement will also strengthen confidence in the charity sector. It benefits the whole sector when large charities are properly
accountable to the donating and taxpaying public," says Mrs Goodhew.
"The Department of Internal Affairs will start monitoring the financial reports lodged by registered charities from 2016 onwards," says Mrs Goodhew.
Not sure whether you need an audit or a review? Easy - just give us a call on 578 3386.