| Frequently Asked Questions
What financial reporting standards should you apply for your annual financial statements, if you have more than $2 mil of annual expenditure?
As per the table above, you are required to report as a tier 2 PBE.
How can you minimize your auditing cost?
The time and cost of auditing is dependent on not only the size and complexity of the organisation’s financial systems, but also the extent of the evidence of management oversight of key reporting, and the accounting control environment on significant transaction streams. We take a risk based approach to auditing and assess if the management oversight is good, and the accounting control environment is one in which errors and omissions would be detected by a number of people. Thus, if the audit risk assessment is low, then the audit time can be reduced, as low risk audits means less audit evidence is required to gain the assurances needed.
How long does an Audit or Review take?
About 2 – 3 weeks. For an audit, the time delay can depend on how long it takes to get the confirmation of bank balances, loans, outstanding debtor balances, or other communications where we consider that the information is relevant to the financial statements.
You are a small organisation and have not been reviewed or audited for years, is it necessary?
As noted in the above table, tier 3 organisations below $500,000 expenditure and tier 4 do not need external assurances on their performance reporting. However, other aspects such as funders, membership, or deeds of incorporation may request or stipulate some assurances on performance reporting. Audits and reviews may be undertaken as and when required, or deeds of incorporation updated to reflect the current environment. Our first year assurance work will often have a qualification with respect to the opening balances that have not been audited or reviewed.
Your Trust Deed / Constitution requires an audit but do the Charities, Members or Funders?
The members can be advised of a motion to change the deed requiring that an external assurance on annual PERFORMANCE statements be done as required by the management, statute, or by the members at any special meeting. Please ensure that you understand the clauses in the deed or constitution around the amending process, and consult a legal representative, if professional guidance is needed.
You have your accounts prepared by a Chartered Accountant, will the audit or review fee be less?
Yes. Audit and review fees can be reduced because of the time saved when properly constructed and reconciled financial reports are presented for audit or review. Also, the accountant will provide a file showing how they have reconciled key balances, thus showing some integrity of the accounting systems, and accuracy of some figures reported in the financial statements.
If you are a large Charity who issues Debentures or an Investment Prospectus to the public, can we help?
We are not registered auditors of issuers and these audits are outside our scope of audit work.
Is it acceptable for your Treasurer to do everything?
Reliance on one person for all the accounting processing, receipting, and payments does give rise to more auditing work because the risk of errors or omissions are higher. These risks can be minimized if the organization’s governance, receive monthly financial reports showing the actual compared to budget, and a list of payments made.
If you use Microsoft Excel for Accounting can we help you?
Organisations requiring assurances on performance reporting should be using a cloud or computer based accounting system such as Xero, MYOB, or Quick Books. Excel can be used as long as you can clearly show how an opening bank reconciliation, plus total income for the year, less total payments, equals the closing bank reconciliation. The information in the excel sheets for income and payments details, should be checked off against the bank statements.