General questions answered in BDO's Not For Profit Industry.

The Charities Act 2005 (“The Act”) requires some charities to have an audit or review based on their size.If a registered charity has spent more than $1.1 million in each of the two preceding financial years, then it requires an audit. If the charity has spent more than $550,000 in each of the two preceding financial years, then it requires a review at a minimum.

However, for some smaller charities an audit or review will be required if it is included in the rules of the charity. Please check the rules that govern your organisation to make sure that they are being followed correctly when it comes to understanding whether you will need to be audited or reviewed.

If you would like to discuss an audit or review contact your local BDO adviser for more information and support.

 When an audit or review is required, it must be performed by a Qualified Auditor.This means they must be recognised by Chartered Accountants Australia and New Zealand (CAANZ) or CPA Australia. 

 Charities are required to submit their annual returns within 6 months of their balance date. The process is relatively straightforward and can be completed online. Head to Charities Services for more information. Remember that you will need to file both an annual return and your financial statements or a performance report to Charities Services. 

 For a not-for-profit organisation there are four reporting tiers available.The relevant reporting tier for an organisation are determined based on the criteria found from the External Reporting Board. The eligible tier is largely determined by whether the organisation has any public accountability and its size. 

At BDO we are pleased to publish illustrative financial statements that are available for download from our website.

The audit section of our website contains summaries of PBE Standards currently in effect in New Zealand.

If you are reporting under Tier 3 or Tier 4 financial standards, then you are required to prepare a statement of Service performance.

How to write an amazing Statement of Service Performance

If you are reporting under Tier 1 or 2, then is effective for reporting period beginning on or after 1 January 2022 although early adoption is permitted.  At this point (2021) organisations will be in their comparative year and so you will need to consider how and what will be reported under the new standard.  Guidance can be found here, with additional templates and checklists available here.

 Yes, apart from the new SSP standards (PBE FRS 48) which is detailed above, for financial reporting periods beginning on or after 1 January 2022, PBE IPSAS 41 Financial Instruments (“PBE IPSAS 41”) replaces PBE IPSAS 29 Financial Instruments: Recognition and Measurement (“PBE IPSAS 29”). Earlier adoption of PBE IPSAS 41 is permitted.

Further details can be found on our website.

On the horizon, big changes are expected to be on the way for PBE’s in relation to lease accounting, which you can read more about here.

Key contacts

Matt Coulter | BDO Auckland

Matt Coulter

Audit & Assurance Partner, Technical Director - Assurance for BDO New Zealand, National Not-for-Profit Sector Leader