Counting on charity

When it comes to running a business or a charity, a financial statement audit can provide a crucial check and balance.

COMMENT

Never underestimate the importance of an audit. When it comes to running a business or a charity, a financial statement audit can provide a crucial check and balance. Indeed, for the charitable sector, confidence in the governance and financial integrity of an organisation can be the difference between survival or failure.

The government's decision to introduce new rules from April 2015 requiring registered charities with annual expenditure of over $1 million to have their financial statements audited, and those with over $500,000 annual expenditure to have their financial statements reviewed, is therefore a welcome development. 

It brings New Zealand into line with the general global trend toward a tiered system of audit and review requirements for charities that will only serve to enhance community confidence in the sector. 

However, while this increased level of scrutiny and accountability will doubtless help build trust in the sector, for some charitable organisations being able to afford an audit or review can be a stretch. 

It’s incumbent on the accounting profession, therefore, to step up at times like these and show a little charity of its own, by volunteering to work with the charitable sector on a pro bono basis. 

The accounting profession has a long tradition of pro bono work for charity and other not-for-profit entities that would otherwise struggle to meet their obligations.

CPA Australia actively supports this tradition in providing its members, wherever they are around the world, with a professional indemnity insurance facility for their pro bono accounting services in the community, completely free of charge. 

This is in recognition of the fact that professional indemnity insurance is one of the primary costs involved in performing professional services.

Around 30% of CPA Australia’s more than 144,000 members operate outside Australia, including a fast-growing cohort in New Zealand.  CPA Australia is committed to supporting our global membership base giving back to their local communities. 

These are important measures that can have a profound impact in ensuring that our charities and other not-for-profits can focus on their core business of critical community work. After all, in the words of Winston Churchill: "We make a living by what we get, but we make a life by what we give.”

Alex Malley is the chief executive of global accounting body CPA Australia