Frequently Asked Questions?

We understand that an idea needs to be structured…

“Whatever you do, be different. If you’re different, you will stand out.”
— Anita Roddick

Q1. How can we accept a review when our constitution states that the auditor shall ‘audit’ the financial statements?

The Associations Incorporation Act 1981 (Qld) guides our understanding of this inconsistency under section 1D, which states that the legislation shall prevail to the extent of the inconsistency with the constitution. This allows us to undertake reviews under the legislation.

 Q2. What are the positives and negatives when deciding on a review?

Extract from Australian Charities and Not-for-Profits Commission (ACNC):

 Review Positives

  1. Generally cheaper than an audit

  2. Takes less time

  3. Easier to find a reviewer than an auditor (especially in regional areas)

Review Negatives

  1. Lower level of assurance – less likely than an audit to identify financial reporting issues

  2. Lower level of examination of charity’s financial report

Audit Positives

  1. Higher level of assurance – opinion that your charity meets requirements, based on identifying any financial reporting issues

  2. Higher level of examination of the charity’s financial report based on more detail and evidence

Audit Negatives

  1. Can cost more money

  2. Can take more time

  3. Can be more challenging to find an auditor

A Treasury consultation paper issued in February 2021 described increasing financial reporting thresholds for ACNC-registered charities and moving nearly 3,500 charities from a large category to a medium category:

  • “These charities would save around $3,000 in professional service expenses annually.”

  •  “This will allow these charities to redirect their resources to fulfilling their charitable purpose, including helping vulnerable Australians. This will support the charity sector at a time when, for many charities, donations have plummeted, access to volunteers is constrained, and demand for services has increased.”

The ACNC Commission, in a media release issued in January 2022, described the increased financial reporting thresholds as:

  • “This is good news for thousands of charities that will see their sizes shift downward and, consequently, have their reporting obligations reduced.”

  •  “The change is part of the government’s efforts to reduce red tape for Australia’s charities. Reducing red tape for the charity sector is a vital part of the ACNC’s work, and is set out in our third object: to ‘promote the reduction of unnecessary regulatory obligations on the sector.”

  •  “Minimising red tape is crucial in supporting a vibrant, robust and innovative sector. We want charities to be able to focus their efforts and funds on providing services rather than being bogged down in unnecessary administration.”

  •  “We welcome the changes as an appropriate balance in reducing the regulatory burden on charities while maintaining suitable transparency of their operations and finances. We look forward to the relief these changes will bring for many charities in the years to come and the resulting benefits for the community.”

Q3. What are the financial reporting thresholds?

Australian Charities and Not-for-Profits Commission:

  • Small charities are those with annual revenue under $500,000 - no review or audit required; most choose a review for good governance.

  • Medium charities—those with annual revenue of $500,000 or more but under $3 million—can be reviewed or audited.

  • Large charities are those with annual revenue of $3 million or more - must be audited.

Queensland Associations Incorporation Act 1981:

  • Large associations —must be audited

    • current assets of more than $1 million

    • total revenue of more than $500,000

  • Medium associations — can be reviewed or audited.

    • current assets between $300,000 and $1 million

    • total revenue between $150,000 and $500,000

  • Small associations — no review or audit required; most choose a review for good governance.

    • current assets of less than $300,000 and total revenue of less than $150,000.

Q4. We are an incorporated association in Queensland. To whom do we report?

Under the Queensland Associations Incorporation Act 1981, an incorporated association registered with the Australian Charities and Not-for-Profits Commission (ACNC) is classified as an exempted class under section 9C of the Associations Incorporation Regulations 1999 (Qld). This class exemption exempts them from their reporting obligations of the Associations Incorporation Act 1981 (Qld) under section 59A of the legislation and requires them to report under the Australian Charities and Not-for-Profits Commission Act 2012.

Q5. What types of safeguards should we adopt for a review?

Organisations that have adopted a review have implemented at least two of the following:

  1. Segregation of duties.

  2. Accounts and records are maintained on Xero or MYOB online.

  3. Engaged an external bookkeeper.

  4. The accounts are maintained on a cash basis (in Microsoft Excel).

  5. Board members have access to the bank statements.

  6. Board members have access to the online accounts or cash book.

  7. The head office maintains the accounts and records.

  8. You have a qualified accountant on your board.

Q6. What are the general principles of a review of a financial report?

The general principles of a review of a financial report include:

  • Compliance with Ethical Requirements: The review must comply with relevant ethical requirements for auditing the organisation’s annual financial report.

  • Quality Control Procedures: The reviewer must implement quality control procedures applicable to the individual engagement.

  • Professional Judgement and Scepticism: The reviewer must plan and perform the review by exercising professional judgement and maintaining an attitude of professional scepticism, recognising that circumstances may exist that cause the financial report to require a material adjustment for it to be prepared in all material respects, in accordance with the applicable financial reporting framework.

Q7. Can you still provide us with grant acquittals when doing a review?

We can provide an audited grant acquittal for your funding agreement, with the financial statements and our review report.

Q8. Do we need a registered company auditor?

We offer financial statements, review reports, and grant acquittals for small and medium-incorporated associations, organisations registered with the Australian Charities and Not-for-Profits Commission (ACNC), and public companies limited by guarantee registered with the Australian Securities and Investments Commission. We also offer audits for large incorporated associations not registered with the ACNC.

The need for a registered company auditor varies depending on whether your organisation is an incorporated association, a company, or registered with the ACNC. A registered company auditor must carry out all audits performed under the ACNC and the Corporations Act, regardless of size. A Chartered Accountant may conduct audits for incorporated associations not registered with the ACNC and can perform reviews under the ACNC and Corporations legislation.

All Chartered Accountants in public practice are required to hold a public practising certificate and professional indemnity insurance.

Q9. Can you provide us with examples of financial statements?

You may find examples of our work with publicly available financial statements on the Australian Charities and Not-for-Profits website with the following Australian Business Numbers (ABN).

1)          31 025 292 522

2)          28 627 003 039

3)          77 309 652 911

4)          92 009 872 011

Q10. What information do you need for our review?

To facilitate our work, we welcome receiving PDF documents, invoices, and bank statements, enhancing your process. Please don't worry; all your documents will be handled with the utmost security and confidentiality with Dropbox Request.

We greatly appreciate your cooperation in providing the following information (if applicable).

  • All bank statements for the year (PDF is ok).

  • All invoices for expenses and income (income receipts, if applicable).

  • Payroll records, time sheets and superannuation payments.

  • Copies of minutes.

  • Insurance policies and

  • Cashbook, MYOB or Xero

 We can access records and invoices attached to or maintained in Xero or MYOB. Depending on when we receive the completed documents, we will need two weeks to schedule and complete our work and to return the financial statements for signing with Dropbox Sign. Please let us know if you want us to provide you with a Dropbox Request.