Charities form one distinct subset of not-for-profits (NFPs), with their objectives being primarily of a charitable nature. The legal meaning of charity includes the charitable purposes of relieving poverty, sickness or the needs of the aged, advancing education, advancing religion and other purposes beneficial to the community. Examples that would fall within the other purposes category include providing not-for-profit childcare services, advancing arts and culture, health, promoting animal welfare and protecting the environment. An overwhelming majority of NFPs are not charities and they can exist for the exclusive benefit of members, or to serve a specific group of people, community or purpose. Examples include clubs formed for a social, recreational or sporting purpose, and professional and trade associations.

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A guide to financial reporting and assurance requirements

The commencement of the Australian Charities and Not-for-profits Commission (ACNC) on 3 December 2012 marked the beginning of a new era in the oversight of charities.

Charities registered with the ACNC will be required to comply with financial reporting and audit and assurance obligations under the Australian Charities and Not-for-profit Act 2012 (the ACNC Act), the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Act 2012 (the ACNC Consequential and Transitional Act), and associated financial reporting regulations.

The focus of Part 1 of this guide is the statutory financial reporting and assurance obligations applicable to registered charities, as set out in the ACNC Act and the ACNC Consequential and Transitional Act and the accompanying financial reporting regulations. The remainder of this section provides an overview of the ACNC and some other relevant considerations applicable to charities. Flowcharts providing a graphic representation of the financial reporting and audit and review requirements are provided in the appendices. A checklist (Appendix IV) is also appended to this guide to assist registered charities to ascertain financial reporting and audit and review requirements they may have in addition to those required by the ACNC Act.

Part 2 provides guidance on the relevant requirements applicable to our members involved in the preparation of charity financial reports or those members involved in the conduct of audit and review of charity financial reports.

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