In 2016, New Zealand introduced a financial reporting regime for registered Charities that is unique in the world, and probably the toughest. Only in New Zealand do even the smallest charities have to comply with accounting standards set by the agency (External Reporting Board, XRB) that was created to regulate financial markets, and that is outside direct government control!
Amongst English-speaking countries, and possibly in the rest of the world, New Zealand also has the lowest expenditure threshold above which more complex accrual accounting has to be used. Only Australia has a lower threshold than New Zealand for expenditure above which a review or audit is required, but in return it does not require charities with expenditure under $A 250,000 to file any financial report at all.
The Charities Act is under review at the moment. The discussion focuses on heaping more compliance on Charities, such as a requirement to comply with governance standards.
CCA believes the requirement for charities to comply with the Financial Reporting Act should be removed from the Charities Act, and control over charity financial reporting handed back to the regulator of charities.
|Have to comply with professional Accounting Standards?
|Financial report content regulated by
|Annual expenditure above which accrual accounting has to be used
|Annual expenditure below which charities do not have to file a financial report.
|Annual expenditure above which accounts must be reviewed/audited
|$500,000 (250,000 pounds)
|$260,000 ($A 250,000)
|External Reporting Board