How Often Does My Company Need Auditing in New South Wales?
Depending on the size and type of company, an external audit may be entirely voluntary or mandatory by law once per year. At Brown Auditing Services in New South Wales, we provide expert financial auditing services. We audit not for profit organisations as well as private and public companies. Below, we take a look at when these different companies need to be audited.
When are We Legally Required to Have an External Audit?
Private companies and not-for-profits that meet a certain threshold, and all public companies, are legally required to have an external audit with a certified auditing firm every year. While there is no strict protocol for smaller businesses and organisations, it’s good business sense to get audited once a year. This helps to ensure that your record-keeping doesn’t get sloppy, disorganised, prone to error, or create potential risks down the track.
Small and medium sized organisations should conduct smaller, internal audits every 3 to 6 months to help maintain financial reporting requirements. An external audit every year can help refine internal control processes and identify potential areas of improvement.
Large Private Companies
Large private companies must lodge a financial, director’s and auditor’s report with the Australian Securities and Investments Commission (ASIC) every financial year. Small private companies are typically not required to prepare such reports but must keep adequate financial records. A private company is currently considered ‘large’ if it meets at least two of these three thresholds at the end of a financial year:
- $50 million or more in consolidated revenue
- $25 million or more in consolidated gross assets
- 100 or more employees
These requirements exist to ensure stringent financial reporting requirements are only aimed at economically significant companies and to avoid unnecessarily imposing time-consuming accounting obligations on smaller businesses.
Not for Profit Audit Requirements
Some not for profit organisations may have a requirement for an annual external audit specified within their constitution or rules. Registered charities with annual revenue over $250,000 must provide financial statements to the Australian Charities and Not-for-profits Commission (ACNC) within six months of the end of the financial year.
Organisations with revenue under that threshold only need to submit the Annual Information Statement but should refer to their constitution regarding financial reporting and auditing obligations to members. Brown Auditing Services understands not for profit audit responsibilities and processes. We expertly audit not for profit organisations to ensure compliance.
Benefits of Auditing
Even if a company audit is not mandatory, regular auditing can be highly beneficial, helping to reveal weaknesses and opportunities in your financial reporting. You may, for example, discover your system is not tracking some transactions which affect your financial forecasts. Audit services can help your company identify poor accounting practices whilst helping to improve your financial reporting systems.
A regular external audit can also help detect and deter fraudulent business practices that might otherwise go unnoticed without the keen eye of an experienced accounting professional. A company audit may also enable more efficient tax planning as proper auditing practices streamline tax returns, taking the stress out of doing your taxes each year.
Company Audit Services in New South Wales
Brown Auditing Services offer expert financial auditing advice and services to a range of entities, from public and private companies to trusts and not-for-profits across Tamworth and the Central Coast. To arrange a no obligation consultation, call our team today on 0428 661 200 or contact us online to learn how we can help.