Audit and reporting exemptions
Tier 1 incorporated associations
The Director-General, or his delegate, has the delegation to authorise exemptions, by way of Class orders, under the Associations Incorporation Act 2009. The following exemptions may apply:
Tier 1 associations are associations whose total revenue as recorded in the income and expenditure statement for a financial year exceeds $250,000 (excludes GST) or current assets (defined as assets other than real property and capable of depreciation) exceed $500,000.
Qualifications of auditor
An auditor of a Tier 1 association need not be a registered company auditor provided that the person appointed is:
- a member of The Institute of Chartered Accountants in Australia, or a member of CPA Australia, or a member of the Institute of Public Accountants (formerly the National Institute of Accountants), and holds of public practice certificate issued by one or more of these bodies, or
- the Auditor-General of the Commonwealth of Australia or of a State or Territory.
For an audit carried out be a non-registered company auditor, the auditor's report must record whether the auditor is a member of The ICAA, CPA Australia or the NIA and holds a public practice certificate issued by one of those bodies.
An auditor of a Tier 1 association is exempt from the independence requirements of section 52(2) of the Associations Incorporation Act 2009 provided that:
- the audit of the association is carried out in accordance with the code of conduct relating to independence in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethics Standards Board, and
- the auditor's report for the financial statements for the association includes an auditor's independence declaration as follows:
- as auditor for the audit of ..... (name of association) for the financial year ended ..... (date), I declare that, to the best of my knowledge and belief, there have been no contraventions of the code of conduct relating to independence in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board.
Financial reporting requirements
An association can be exempt from the financial reporting requirements of section 43(2) of the Associations Incorporation Act 2009 in relation to application of Australian Accounting Standards where total revenue reported in the income and expenditure statement for a financial year is less than $2,000,000.
However, in applying this Class order an association must meet a minimum range of requirements in preparing the financial statements. Details of these requirements are contained in Class order 11/01 Financial reporting requirements together with an explanation of the Class order and further guidance information contained in Regulatory guide A1.
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