Audit, Review or Examination of Financial Reports
Audit, Review or Examination of Financial Reports
The Statute requires the Parish to appoint an Auditor, Reviewer or Examiner, depending upon the gross income of the Parish. Please note that the gross income is not the total of Ordinary Income and Commercial Income and is used in its ordinary meaning of total income before deduction as determined in accordance with usual accounting practices.
Under Section 65.1 of the Statute the Parish determines the requirements as follows:
Every parish whose "gross income":
- exceeds $1,000,000 must appoint an Auditor;
- exceeds $250,000 but does not exceed $1,000,000, must appoint either an Auditor or a Reviewer, at the direction of parish council and subject to the discretion of parish council; and
- is less than $250,000, must appoint an Independent Examiner.
An audit must be conducted by an Auditor who is:
- A registered company auditor (as defined by the Corporations Act 2001)
- An audit firm, or
- An authorised audit company.
A review must by conducted by a Reviewer who either:
- Meets the requirements to be an Auditor; or
- is a current member of a relevant professional body (CPA, CAANZ or IPA) who is qualified to undertake a review (in line with the Corporations Act 2001).
An Independent Examiner must have appropriate experience in financial management, or accounting, including relevant qualifications. Independent Examiners require the approval of the Diocesan Secretary prior to appointment. This approval can be applied for on the approved form that is submitted to Diocesan Office.
The Parish Auditor, Reviewer or Examiner are appointed at the annual general meeting of parishioners.
The Auditor, Reviewer or Examiner cannot be a member of the Parish Council or anyone who has been found guilty of a criminal offence. Anyone holding any paid position of the parish or lay person being under contract to perform any work for the parish is ineligible to hold the position of Auditor, Reviewer or Examiner.
It is the duty of the Auditor, Reviewer or Examiner to:
- Audit, review or examine (as appropriate) the annual accounts and report to the annual meeting. Where an audit or review is conducted, it is required to be in accordance with Australian Auditing Standards issued by the Auditing and Assurance Standards Board; and
- report to Diocesan Council and to the annual meeting anything that the Auditor, Reviewer or Examiner considers to be irregular or illegal.
As soon as the books for the year have been closed, the Treasurer will need to send or take to the auditor all the papers that will be needed in order to carry out the audit. This will include:
- A receipts and payments account and statement of outstanding debtors and creditors (if accounts are on a cash basis) or income and expenditure account and balance sheet (if accounts are on an accruals basis);
- the accounting records e.g. ledgers, cash books, journals etc whether computerised or manual;
- tax invoices, receipts, cheque stubs and other documentation supporting payments made;
- counters’ records, deposit books and other documentation supporting receipt of monies;
- bank statements, deposit account statement, interest statements, statements from Diocesan Office etc.
Auditors, Reviewers and Examiners are independent and free to carry out whatever audit procedures they deem necessary in each Parish’s circumstances. Guidelines for Independent Examiners and an Independent Examiner Review report template are available on the Diocesan website under the Annual Financial Returns Forms section.
The Audited, Reviewed or Examined accounts are then presented to the annual meeting of parishioners together with the audit, review or examination report thereon. The Parish Council will have seen copies of these accounts and should have discussed them and their implications with the Treasurer at a meeting between the end of the financial year and the public presentation of the accounts. The Parish Council should formally adopt the accounts for presentation to the annual general meeting.
Any weaknesses in the Parish's system of accounting and internal controls which came to the attention of the Auditor’s, Reviewer’s or Examiner’s during notice in the course of their procedures audit together with their auditor's recommendations for improvements should be included provided in writing toin a letter to the Parish Council.
Any irregularities should must be reported to the Diocesan Council and the Annual Meeting.