Incorporated Associations Reporting Obligations
Changes from 1 July 2016
We’ve all heard the old joke from the east “WA is an acronym for Wait Awhile” and we’ve all spared the statement a wry smile. The latest slow moving development for WA has finally arrived – changes to The Associations Incorporation Act 2015. Finally, Western Australian incorporated associations will require audits, regardless of what their constitution stipulates.
It received Royal Assent on 2 November 2015 and will replace the existing Associations Incorporations Act 1987, which has provided a framework of regulation for all incorporated associations in Western Australia until this point.
The biggest change sees the implementation of a three-tiered system of financial reporting requirements, based upon the association’s revenue. It works as follows:
Revenue of < $250k
Can elect to prepare basic financial statements with no independent review or audit.
Revenue of $250k – $1 million
Must prepare financial reports that give a true and fair view of the financial position of the association in accordance with the Australian Accounting Standards. These reports must be reviewed or audited by a member of a professional accounting body.
Revenue > $1 million
Must prepare financial reports that give a true and fair view of the financial position of the association in accordance with the Australian Accounting Standards. These reports must be audited by a qualified auditor.
Make no mistake, the introduction of financial reports in accordance with Australian Accounting Standards and the presence of an audit requirement are significant and onerous developments. Planning is required now to implement an appropriate response. Optima Partners has the accounting expertise to guide an organisation through this crucial phase. Our associates at Optima Audit specialise in tailoring audit solutions for not-for-profit organisations and stands ready to assist in meeting the regulatory requirements.
Director – OPTIMA AUDIT