In addition to all the legislative requirements a normal business must contend with (i.e. taxation, WH&S, environmental, etc.), not-for-profit entities are subject to a multitude of specific reporting legislation and property requirements determined by the legal structure of the entity.
These can include:
- Companies limited by guarantee - governed by Corporations Act 2001
- Incorporated associations - governed in Queensland by Associates Incorporation Act 1981
- Co-operatives - subject to various State legislation
There are also very specific record keeping, reporting and auditing requirements for NFP entities.
Under the Corporations Act, NFP entities must meet the following requirements:
(1) Records Keeping
- Financial records must correctly record and explain its transactions, financial position & performance
- Records must enable true and fair financial statements to be prepared and audited
- A three tier reporting framework exists for this
- Where a Tier 2 company elects to have review instead of an audit, this must be performed by a member of the three accounting bodies who hold a public practice certificate
Associations Incorporation Act
Under the Associations Incorporation Act, NFP entities must meet the following requirements:
(1) Record keeping
- Financial records must correctly record and explain its transactions, financial position and performance
- The entity must keep its accounts in a manner enabling the preparation of true and fair accounts
- The entity must keep its accounts in a manner enabling auditing of the accounts in accordance with the legislation
- The members of the management committee of the association must ensure that a financial statement for its last financial year is prepared 6 months after
(2) Reporting & Auditing
- An association must have its accounts audited if they are:
- a level 1 incorporated association;
- a level 2 incorporated association, if the association is required to have an audit conducted under the Collections Act 1966, the Gaming Machine Act 1991 or under any law for any other purpose;
- a level 3 incorporated association, if the association is required to have an audit conducted under the Collections Act 1966, the Gaming Machine Act 1991 or under any law for any other purpose.
Make sure you get the right advice
As a member of the Institute of Chartered Accountants, O'Regan & Partners qualifies as a provider of these services, and all our firm's partners hold public practice certificates - please talk to us about on your compliance obligations under these Acts.
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