It has been announced by Minister of Commerce – Craig Foss and Community and Voluntary Sector Minister – Jo Goodhew, that registered charities with an annual expenditure of $500,000 or more are now required to have their financial statements review by a qualified accountant and charities with an annual expenditure over $1 million will be required to have their financial statements professionally audited.
“These changes will improve the quality of financial reporting among charities and result in greater confidence that financial statements are reliable,” says Mr Foss.
It has been said that the new requirement will strengthen confidence in the charity sector, ensuring large charities are properly accountable to the donating and taxpaying public.
The amendments will be included in the Accounting Infrastructure Reform Bill which will amend the Charities Act. The Department of Internal Affairs will start monitoring lodged financial reports from 2016 onwards. It is said that approximately 2,700 Charities will be affected by the new requirement.
Charities with annual expenditure of:
- $1 million or more, will be required to have their financial statements audited by a qualified auditor.
- Between $500,000 and $1 million, will be required to have their financial statements reviewed by a qualified accountant.
- Less than $500,000, can choose to have their financial statements reviewed or audited, or do neither.
If you require further information on this subject please contact your William Buck advisor.