Auditing small and medium entities
Auditing small and medium entities requires a different approach to working with large companies and organisations.
Guides
Small Entities Audit Manual (SEAM)
The Small Entities Audit Manual gives specific guidance for conducting the most commonly encountered small audits and reviews, including those for self-managed superannuation funds, associations, companies limited by guarantee, trust accounts and grant acquittals. CPA members will need to log in for free access. Once members are logged in, a 100 per cent discount is applied when you add the product to your cart. When the checkout process is complete, you’ll be able to access the guide using the course player, click on “Play”.
Guide to using ISAs in the audits of SMEs, Fourth Edition, 2018 – IAASB
This IAASB guide aims to help firms efficiently and proportionally apply International Auditing Standards (ISAs) on small and medium-sized entity audits.
This is an updated guide informing charities and their advisers on their financial reporting and assurance obligations under Australian legislation and regulations.
CPA Australia’s A Guide to Understanding the Financial Reports of Not-for-profit Entities will be of value to a range of stakeholders, including those who work in not-for-profits, to better understand the accounting and regulatory aspects of not-for-profit financial reporting.
Australian incorporated associations are governed by each State and Territory’s Associations Incorporation Act, which also establishes the reporting requirements.
About working with charities
Charities form one distinct subset of not-for-profits (NFPs), with their objectives being primarily of a charitable nature.
International perspective
IAASB: Audits of less complex entities - feedback statement
The International Auditing and Assurance Standards Board (IAASB) released a Feedback Statement sharing what the Board has heard regarding audits of less complex entities in response of its recent Discussion Paper: Audits of Less Complex Entities (LCEs): Exploring Possible Options to Address the Challenges in Applying the International Standards on Auditing (ISAs).
IFAC: Practice Transformation Action Plan
These extraordinary circumstances offer small and medium-sized practices (SMPs) significant opportunities to adapt and service a rapidly changing world. IFAC has developed thought leadership on practice transformation, focused on how SMPs can embrace change, leverage technology, manage talent and have a renewed emphasis on providing relevant and value-added services.
New Zealand XRB report: Small charities' assurance needs
What drives small charities to obtain assurance over their financial statements?
Auditing and assurance regulators
There are a range of regulators relevant to the reporting and auditing or assurance obligations of small and medium entities at both the Commonwealth and State or Territory level.
Commonwealth Regulators
The following oversee small to medium entities and their auditors.
| Regulator | Oversight |
|---|---|
| ASIC |
|
| ATO |
|
| ACNC |
|
| Registered Organisation Commission |
|
| Clean Energy Regulator |
|
State-based regulators
1. Incorporated associations and state-based charities
Incorporated associations may be subject to audit or review. Some charities are not registered with the ACNC but hold a state-based fundraising licence and so are a state-based charity. Mostly these are regulated by the same regulator as the incorporated associations.
| Jurisdiction | Regulator |
|---|---|
| Australian Capital Territory - Incorporated associations and NFPs | Access Canberra (Fair Trading) |
| New South Wales - Incorporated associations and co-operatives | NSW Office of Fair Trading |
| Northern Territory - Incorporated associations | Northern Territory Government |
| Queensland - Incorporated associations | The Office of Fair Trading (OFT) |
| South Australia – Incorporated associations | Consumer and Business Services |
| Tasmania - Incorporated associations | Consumer, Building and Occupational Services |
| Victoria - Incorporated associations and fundraising licensees | Consumer Affairs Victoria |
| Western Australia - Incorporated associations and fundraising licensees | Department of Mines, Industry Regulation and Safety |
2. Real Estate Agents and Conveyancer' Trust Accounts
Trust accounts must be audited.
| State/Territory | Year end | Auditor's Report Due | Regulator |
|---|---|---|---|
| Australian Capital Territory – real estate, business and stock and station agents | Allocated by Commissioner for Fair Trading | Within three months after the end of the audit period | Access Canberra (Fair Trading) |
| New South Wales – real estate agents and conveyancers | 30 Jun | 30 Sept | NSW Office of Fair Trading |
| Northern Territory – licenced business agent, estate agent or conveyancer | 30 Jun | 30 Sept | Department of the Attorney-General and Justice (Agents Licensing Board of the Northern Territory) |
| Queensland – property agents, motor dealers and debt collectors | The end of the month the licence expires | Four months after year end | The Department of Justice and Attorney-General (The Office of Fair Trading) |
| South Australia – land agents | Two months prior to licence expiry | End of the month of licence expiry | Consumer and Business Services |
| Tasmania – property agents | 30 Jun | 30 Sept | Property Agents Board of Tasmania |
| Victoria – estate agents and conveyancers | 30 Jun | 30 Sept |
Consumer Affairs Victoria |
| Western Australia – Real estate agents, business agents, and settlement agents and business settlement agents | 31 Dec | 31 Mar | Department of Mines, Industry Regulation and Safety (Consumer Protection) |
3. Legal Practitioners' Trust Accounts
Examinations by a registered examiner are required for legal practitioners' trust accounts.
| State/Territory | Year end | Examiner's report due date | Law Society resources |
|---|---|---|---|
| Australian Capital Territory | 31 Mar | 31 May | ACT Law Society |
| New South Wales | 31 Mar | 31 May | NSW Law Society |
| Northern Territory | 31 Mar | 30 Jun | NT Law Society |
|
Queensland *Declaration of trust monies witnessed by a Justice of the Peace and lodgement of financial security due by 14 April |
31 Mar | 31 May | QLD Law Society |
| South Australia | 30 Jun | 31 Oct | Law Society of South Australia |
| Tasmania | 31 Dec | 31 July | Law Society of Tasmania |
| Victoria | 31 Mar | 31 May | The Victorian Legal Services Board and Commissioner |
| Western Australia | 31 Mar | 31 May | Legal Practice Board of WA |
4. Queensland Building and Construction Commission
The Queensland Building and Construction Commission (QBCC) regulates the building industry and requires annual reporting (unaudited) for building and construction licensees and audits or reviews for changes of category of licence.
These FAQs summarise annual reporting and Minimum Financial Requirement (MFR) reporting and audit/review requirements for QBCC licensees.
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