Audit of Not for Profit Organisations

A non profit organisation (not for profit), is similar (but different) to a charity and is an organisation that does not operate for profit or personal gain of its members that govern the organisation. The premise of the running of the not for profit is a greater common objective of the members. They can however still assist their members if it aligns with their purpose and/or mission. However, they are subject to strict guidelines. An audit of a not for profit organisation centres around ensuring compliance with the very governing principles that were responsible in the formation of the organisation in the first place.

Just like any other entity, not for profits too are guided by their governing principles and regulated by ASIC, the ATO as well the ACNC. (The Australian Charities and not for profits commission).  These governing principles and the rules set forth by regulation is what paves the fundamentals for the audit of not for profit organisations.

Our fee for a not for profit audit starts at $770, however we could provide you with a quick fixed price quote for your peace of mind. Kindly call us and we shall be happy to assist.

Given the name, a common misconception is that not for profits (non profits) do not make profits but generally this is not the case. The term not for profit actually in this context means that making a profit is not the objective and instead the greater good from the service provided by the not for profit is the ultimate aim of the running of the organisation and hence the use of the word not for profit. Given this, it is safe to say that in accounting terms most non-profits( not for profits) will still turn a profit at the end of the financial year however they must solely be used to further the organisation’s objectives. Examples of such objectives may be retaining earnings for a future expansion or setting aside monies to be able to operate for future years to come or to buy a property for the organisation.

Given the complexity of regulation and governing principles and the enormity of the people involved and money operations, it becomes necessary for some not for profits to organize an audit. A One Accountants has experience dealing with a number of Audits of Non profits. (Audit of not for profit organisations).

Non-Profit (Not for Profit) organisations are regulated by the Australian Charities and Not-for profits Commission, or the ACNC for short. They must also follow strict governing criterias and be able upon request to demonstrate their non-for-profit character in order to keep their status as a Non for Profit organisation, more information about the criteria can be found on the ACNC’s website or by calling the ATO.

There is also strict compliance regarding annual reporting requirements to the ACNC. The first requirement is that not-for-profits must report their annual turnover and then compliance requirements are based upon the size of the organisation. Organisations that qualify as Medium and Large, $250,000-$1,000,000 and $1,000,000 + respectively will from 2014 need to have their financial reports either reviewed or audited.

The purpose of an audit is to have a registered auditor provide an opinion as to whether; the not-for-profit’s financial reports have been prepared in accordance with the ACNC’s governing requirements; represent a true and fair view of the financial position and performance, and meet all applicable Australian Accounting Standards (AAS).

An auditor will request information be provided in relation to the financial reports so that the auditor/reviewer may conclude their report and express an opinion. An auditor’s opinion will state the auditor either believes or does not believe that the not-profit-profit has been managed in accordance with the ACNC’s requirements. An auditor’s opinion provides greater assurance than that of a review. It is also a not for profit’s audit, requirement that the findings be conveyed to the board or the committee as applicable for their consideration and review for future operations.

It is also worth noting that an audit can only be carried out by the following people; a registered company auditor, an audit firm or an authorised audit company. When it comes time to engaging an auditor make sure that the auditor your engaging holds the necessary qualifications and licenses in order for them to be able to undertake the audit, as they will not be able to undertake unless they do so.

If you represent a not for profit and are looking for an auditor kindly call us on 0386091889, and discuss your circumstances with us. Alternatively kindly complete the below form and one of us shall be in touch.

Audit of Not for Profit (New Enquiry):

Audit for Non-Profit Organisation



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