New audit rules for Clubs and Associations

From 1 July 2016, the audit rules for clubs and associations in WA have changed.

Do you need help understanding the rules?

From 1 July 2016, smaller incorporated associations – that is, clubs and associations with less than $250,000 revenue per annum – will have no requirement to undertake a review or audit of their current accounts.

Not for profits with a turnover between $250,000 to $1,000,000 will need their financial statements either reviewed or audited by a Chartered Accountant or a Certified Practising Accountant.

Associations with a turnover of more than $1,000,000 cannot select a review and must have an audit, and their financials must be audited by a Chartered Accountant or Certified Practising Accountant with a public practice certificate, or a Registered Company Auditor.

It may seem like additional time, effort and expense to have an annual audit, but there are a number of reasons and benefits for having an audit conducted –

  • an audit of the financial records of the association ensures greater accountability to the members
  • the audit gives assurance that all funds received by the organisation have been correctly collected, documented and banked. It shows that all monies spent by the organisation were for the purpose of the association, approved by the management committee, and documented. Apart from anything else, this helps to protect management committee members against unfounded allegations of misconduct;
  • the audit provides an account of the assets of the association and verifies that records and registers are properly maintained;
  • the audit functions as a check and balance. It requires that the financial statements of the association be kept to a standard in order for the audit to occur and will indicate areas that may require improvement;

The FAJ Auditing team can complete your club’s audit quickly, professionally and at competitive cost.

For additional information about the new audit rules for clubs and associations, please refer to the Department of Mines, Industry Regulation and Safety website which contains questions and answers in relation to the new association law.

 

Author: Daniel Papaphotis
Email: [email protected]