6PAC Service

6-Points Account Check – 6PAC

 

Muscle up your accounts with our 6PAC service! If you’re tired of the rigmarole  – and cost – that audits or reviews entail, then our 6-points account check (6PAC) may be the right alternative for you.

Many community organisations just want someone competent to look over their accounts at the end of the year, iron out errors and make sure everything is compliant. This is what our 6PAC is for. Rather than perform a full audit or review, where we have to be critical about everything we see or be told, we perform six specific checks, and report on each one:

 

1. Is the format of these financial statements compliant with requirements?

There are specific requirements for registered charities or non-charity incorporated societies. Even organisations that are not one of those are expected to produce a report that follows established rules for such things. We check whether this is the case.

A ‘clean’ report line will read: “The financial statements are compliant in format with the Societies Act/Charities Act/reasonable financial reporting practice”

2. Are you doing your bookkeeping right?

This check is about whether you properly separate income and expenses, assets and liabilities, and record these in the right categories. For this we will go through your bookkeeping system (your spreadsheet or accounting software) and look for mistakes. You will be given the opportunity to correct any such errors before we write the report.

A ‘clean’ report line will read: “Transactions recognised by the organisation have been categorised and accounted for according to the requirements for this type of entity.”

3. Are your key assets correctly reported?

Your key assets are your bank accounts and investments. We will check these against external information, i.e. bank statements, investment reports, or bank audit reports.

A ‘clean’ report line will read: “Reported bank and investment balances correspond with information available from the organisation’s banks and investment providers.”

4. Do you keep good records of your expenditure?

A key interest of many stakeholders in not-for-profits is whether all expenditure is receipted or evidenced by bills. IRD or the Charities Act require certain entities to keep such records. We will sample-check your outgoings to get a good picture of this.

A ‘clean’ report line will read: “The organisation keeps sufficient records to document their reported expenditure”.

5. Do your financial statements tell the whole story?

This is about the Notes to your accounts. Registered charities have to report certain items, and other organisations still need to make sure that readers are informed of items that are not self-evident from the numbers alone.

A ‘clean’ report line will read: “Provided Disclosures in the Notes follow legal requirements/reasonable financial reporting practice”

6. Are you doing your accounting right?

This is mostly for organisations who do ‘accrual’ accounting. We will check whether all the expected items are there, such as unexpended grants, accounts payable, receivable etc, and whether the maths is correct. Note that we will not examine your grant tracking system, verify that those bills are really owing, whether your receivables are actually collectible or similar.

A ‘clean’ report line will read: “The calculation of disclosed accruals, such as Accounts Payable, Receivable, prepayments etc, is correct.”

So what’s the difference to an audit?

Unlike an audit, we do not question the information you give us for these checks. We are looking for errors in what has been done, not deliberate omissions.

Most importantly, we do not give assurance that your figures are actually correct. This concerns predominantly your assets and liabilities. For example, we do not check whether your fixed assets are all still in existence, or whether there are assets not reported, for example. We also do not verify your income.

And what’s the difference to just preparing the financial statements?

Some of these checks are already done when we prepare financial statements for a client, but may not be done by other accountants or yourself. In this case, the 6PAC is a second check for those items, and adds a check on your expenditure, which is what most organisations seem to consider the most important. The 6PAC report may also be useful to submit to funders with your financial statements, so they can have some confidence.

What if not everything is as it should be?

One of the beauties of 6PAC is that we can say in the report what problems, if any, we found. An audit or review report can only hint in very vague terms which lines in the Financial Statements a reader may not want to trust, but you generally want to avoid any such statements in an audit or review report. Most funders accept that community organisations are not perfect, and may well appreciate that you do make this effort to get your accounts checked out.

Before we write our report, we tell you exactly what we found and give you the opportunity to correct it, or have us correct it.

Fees

There is a flat fee, depending on the income of the organisation, as follows (as of 1 April 2022):

Financial Statements prepared by CCA:

Income for year Fee ( excl GST) Fee (incl GST)
Less than $100,000 $150 $172.50
$100 – less than $200,000 $200 $230
$200,000 or more $300 $345

Financials Statements prepared by you:

Income for year Fee ( excl GST) Fee (incl GST)
Less than $50,000 $150 $172.50
$50 – less than $100,000 $200 $230
$100 to less than $200,000 $350 $402.50
$200,000 or more $450 $517.50