Auditing

It is recommended at the end of each year (financial or calendar) your affiliate’s finances are audited.  An audit is an independent, objective evaluation of your affiliate’s financial reports and financial reporting processes. The records of your Affiliate do not necessarily need to be audited. Make sure you are familiar with the rules & constitution of your Affiliate and its obligations if incorporated. The membership of your Affiliate can usually pass a resolution requesting an audit. Due to this it is a good idea to maintain the club’s financial records.

The primary purpose for financial audits is to your affilaites committee and members reasonable assurance that financial statements are accurate and complete.

Seeking an accountant who is willing to audit the club’s books on a voluntary basis is not unusual and is a good way to gain help with your Affiliates financial statements. Many associations will have an accountant in their membership you may just need to ask the question. You may wish to ask someone who is not a club member to perform an audit. This provides an independent view of the financials just make sure to give that person plenty of time to audit the accounts they can be very busy people.

Some club rules require an honorary auditor to be appointed at the AGM. An Incorporated club is legally required to have the club’s accounts audited prior to the AGM, for presentation acceptance by the membership.

For incorporated clubs and depending on the complexity of the books, it may be possible to appoint an auditor such as a bank manager, council clerk or a chartered secretary, who is not from a registered company. Unincorporated groups requiring an auditor may approach their local bank manager or council clerk, who may do the work for nothing in support of the club.

When is an Audit Required?

Some club rules require an honorary auditor to be appointed at the AGM. An Incorporated club may legally required to have the club’s accounts audited prior to the AGM, for presentation acceptance by the membership. Just remember each State & Territory in Australia has its own legislation around Auditing Requirements. As a general rule the following applies:

• Affiliates with less than $250,000 revenue are not subject to audit or review but are recommended to have an internal audit as a minimum.
• Associations with revenue over $250,000 are generally required to have an independent Audit.

Why bother with an Audit?

A financial audit provides reasonable assurance for your Affiliate membership that the finances of the affiliate are in a healthy and safe position. Should your Affiliate have a revenue over $250,000 it may be a legal requirement to be audited.

What to expect when being audited.

An Audit will usually include a meeting(s)/interviews with the treasurer and committee, handing over financial statements to be checked. The Auditor may come back with questions prior to signing off so it is important you keep all relevant information throughout the year.

The most important aspect of an Audit is information. Keep all information in one place and ensure you keep all receipts and invoices!

The auditor will require:

• The books of account, consisting of the cash books written up and balanced for the year, and journals and club ledger if these records are maintained
• Bank statements for the whole year
• Copies of deposit slips and cheque butts
• Receipt books containing the duplicates of receipts issued as well as cancelled original receipts. The auditor also needs to sight books of unused receipts
• Vouchers for payments made, which must be placed in numerical sequence of cheques withdrawn
• Access to ”paid’ cheques from the bankers unless receipts have been obtained for all payments made
• A copy of the last audited statement of accounts
• The financial statements for the year now being subjected to audit, together with all supporting documentation
• Any other financial information

Should you require further assistance with Auditing you can contact your state office.