Not-for-profit Associations are viewed in three tiers for the purposes of determining audit requirements:
- Tier 1 – Revenue less than $250,000. No audit or review required, unless specifically requested by the members or regulator;
- Tier 2 – Revenue from $250,000 to $1 million. A review by an independent accountant is required as a minimum;
- Tier 3 – Revenue more than $1 million. An audit is required.
Even if an audit is not legally required, you may want to because:
- Associations need to have an appropriately drafted set of Financial Statements for presentation at the Annual General Meeting and an audit may assist with this;
- Review/audit provides peace of mind to honorary committee members and may assist in attracting new committee members;
- The ability to apply for grant income from government or other agencies may have audit as a
- If revenue levels are close to a threshold you should consider the requirement of the upper level as it may impact you in the near future.