The Law Handbook 2024

Chapter 6.6: Community organisations 625 reports from the ACNC register or that form part of an approved reporting group. If the exemption does not apply, the committee must ensure that financial statements are prepared at the end of each financial year. The committee must be satisfied that the financial statements give a ‘true and fair’ view of the association’s financial position and performance. Whether additional financial reporting is required depends on an association’s total revenue from all its activities in the previous financial year. The Associations Act establishes a three-tiered reporting framework, based on associations’ total annual revenue. From 1 July 2023 to 30 June 2024, the tiers and revenue thresholds are: • tier one: total annual revenue of less than $250,000; • tier two: total annual revenue of between $250,000 and $1 million; and • tier three: total annual revenue of more than $1 million. From 1 July 2024, the tiers and revenue thresholds for financial reporting will be revised to align with the ACNC’s financial reporting thresholds for small, medium and large charities. Where an association’s financial year starts on or after 1 July 2024, its tier will be determined by the new revenue thresholds. From 1 July 2024, the new tiers and revenue thresholds will be: • tier one : total annual revenue of less than $500,000; • tier two : total annual revenue of between $500,000 and $3 million; and • tier three : total annual revenue of more than $3 million. Tier one associations do not have any additional reporting requirements. They do not need to have their financial statements externally reviewed or audited unless: • it is required by the rules of the association; • a majority of members vote to do so at a general meeting; or • they are directed to do so by CAV. Tier two associations must have their financial statements reviewed by an independent accountant. The independent accountant must be: • a member of, and hold a current practising certificate issued by, either CPA Australia, the Institute of Public Accountants, or the Institute of Chartered Accountants in Australia; or • any other suitably qualified person approved by CAV, such as a member of the Association of Taxation and Management Accountants holding a current practising certificate. The independent accountant’s report must be presented to members at the AGM. Tier two associations do not have to audit their accounts unless required by the rules of the association. Tier three associations must have their financial statements audited by an independent auditor. The audit report must be presented to members at the AGM. The auditor must be: • a member of, and hold a current practising certificate issued by, either CPA Australia, the Institute of Public Accountants, or the Institute of Chartered Accountants in Australia; • a registered company auditor or firm; or • any other suitably qualified person approved by CAV, such as a member of the Association of Taxation and Management Accountants holding a current practising certificate. The auditor must be independent, so the auditor must not be: • a member of a committee of the association; • an employer or employee of a committee member; • a member of the same partnership as a committee member; or • an employee of the association. An incorporated association may only remove its auditor by passing a resolution at a general meeting. An incorporated association must provide at least two months’ advance notice of the proposed resolution to all members, the auditor and CAV. A resolution is not required if the association’s auditor resigns. Penalties Committee members should be aware that the Associations Act prescribes various penalties for non-performance of the Act’s requirements. Office holders should make themselves aware of their responsibilities and ensure that they are carried out; this satisfies the office holders’ duties to the association and the law.