Not-for-Profits – Getting ready for an Audit

charity definitionMany not-for-profit organisations in Australia voluntarily choose to have their books audited, while some are required by the ACNC (Australian Charities and Not-for-Profits Commission) to have this done annually.

Whether you are a bookkeeper or treasurer, here are some tips to help you sail through your next audit:

  • Are all your source documents filed in a way that they are easy to access? For example, invoices, bank statements, timesheets, financial statements, cheque books.
  • Is your Asset Register up to date?
  • Has anything significant occurred since your last audit that needs to be explained to the auditor? For example, a change in accounting procedures.
  • Can you provide proof of asset and liability amounts in your Balance Sheet? For example, the balance of bank accounts.
  • Have you got solid internal control systems in place? For example, a written protocol for cash counters. I shared information on internal controls in my post Reducing the Risk of Fraud and Error in Small Business.

These are some of the things your auditor may focus on when auditing your books. Once you receive your report, be sure to take into consideration any recommendations and ask questions if there is anything that you don’t understand.

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5 comments

  1. Hi. Have checked out your recent posts, and found your Not for Profit and Spreadsheet information very informative.
    If I were to transfer money from our “Not for Profit” organisation’s working account (cheque account) to our term deposit account, would I have to show that in my expenditure spreadsheet? Knowing that it is not actually an “expense”, I’m not sure where to show it. Thanks…xx

    Liked by 1 person

    1. Hi. The transfer of funds is not expenditure – the organisation’s overall surplus/deficit position for the period is not affected by the transaction. Do you show a summary of the opening & closing balance of all bank accounts from the beginning of the reporting period to the end? This is a good way of showing committee members any changes in available funds. Whenever funds are moved between accounts I would put an “additional notes” section on my report to keep members informed. I hope this helps. Thanks for reading & commenting.

      Like

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