Accounts and audits in incorporated associations

Accounts

All incorporated associations must record and explain the transactions of the association and their financial position. Prescribed associations have additional requirements.

Prescribed associations

Incorporated associations that are prescribed - ie have gross receipts of more than $500,000 per year - need to lodge annual financial statements. If the incorporated association is not a registered charity, lodge with Consumer and Business Services (CBS).

Incorporated associations that are also registered charities need to lodge an annual information statement with the Australian Charities and Not-for-profit Commission (ACNC).

Preparing financial statements

Incorporated associations must follow the current legal standards of accounting and financial reporting. You must ensure:

1. accounts are prepared
2. committee’s statement and report are prepared
   • committee statement example (PDF 336KB)
   • committee report example (PDF 259KB)
3. accounts with the committee’s statement attached are submitted to the auditor
4. the committee is given the auditor’s report
5. the documents described in 1 to 4 above are presented to members at the annual general meeting.

Audits

Incorporated associations that are 'prescribed' - ie have gross receipts of more than $500,000 per year, excluding member subscriptions - must be audited every year.

The auditor must be independent and be one of the following:

• registered company auditor
• member of the Australian Society of Certified Practising Accountants or the Institute of Chartered Accountants
• someone approved by the Corporate Affairs Commission - restrictions apply.

Committee members or anyone with influence in the association can't conduct the audit (including people who work with them – eg staff member of treasurer's local business).

The auditor’s report is given to the committee no more than five months after the end of the association's financial year and states if:

• recorded activities and finances are accurate
• accounts and auditors' reports of any subsidiary or trust have been examined
• all information was received - including answers to the auditor's questions.

The auditor must advise CBS immediately in writing if:

• there is a deficit for activities or finances
• the auditor has been removed - include the reason
• the association doesn't comply with the Act - eg AGM hasn’t been held.

Contact CBS in writing if you want your prescribed association to be exempt from the accounting and audit requirements. Read section 38 and 39 of the Associations Incorporation Act 1985 for details about the context of the exemption.