CCA has made a submission to the Ministry of Business, Innnovation and Enterprise’s revised proposal to regulate audits for registered charities.
The new proposal captures only about 13% of charities (those with expenditure of over $400,000). These are likely to already comply with the conditions due to existing funder requirements. About half of these will now have the option to have a ‘review’ instead of an audit, if their funders and their own rules allow it. CCA believes that the legislation will have no discernable effect on the sector, although it may generally lower the standard of auditing in the sector if ‘reviews’ become a more widespread option.
In our submission we called for auditor qualifications that include not-for-profit knowledge and expertise, rather than simply requiring membership in a professional body.
We also challenged the view that for-profits are not as financially accountable to the general public as not-for-profits, and we raised concerns about the poor definition of what constitutes a ‘review’. The assurance given by a ‘review’ may only reflect a low percentage of confidence in the correctness of the financial statements, and there is no case law which would define the responsibilities (and liabilities) of a ‘reviewer’.
The full submission can be found here:Submission MOBIE 2013