Charity reporting to become more transparentCommunity and Voluntary Sector Commerce
Charities with annual expenditure of $500,000 or more will be required to have their financial statements reviewed by a qualified accountant, Minister of Commerce Craig Foss and Community and Voluntary Sector Minister Jo Goodhew announced today.
Charities with annual expenditure over $1 million will be required to have their financial statements audited.
“These changes will improve the quality of financial reporting among charities and result in greater confidence that financial statements are reliable,” says Mr Foss.
“The new requirement will also strengthen confidence in the charity sector. It benefits the whole sector when large charities are properly accountable to the donating and taxpaying public,” says Mrs Goodhew.
The amendments will be included in the Accounting Infrastructure Reform Bill which will amend the Charities Act. All registered charities are currently required to attach financial statements to their annual returns under the Charities Act.
“The Department of Internal Affairs will start monitoring the financial reports lodged by registered charities from 2016 onwards,” says Mrs Goodhew.
“Approximately 2700 charities – about 11 per cent of the total will be affected by the new requirement, but the vast majority of these large charities already have their statements professionally audited.
“We concluded that the cost of engaging a qualified accountant would be too high for smaller charities. It will be up to the smaller charities themselves, and their funders, to decide whether an audit or review will be carried out,” says Mr Foss.
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