Transparency is an essential aspect of the finances of every Church and NFP organisation. Transparency engenders trust and a significant measure of certainty about the finances for the members and stakeholders of the church or NFP organisation.
People remain members and stakeholders of their church or NFP because they Trust the leadership in managing the organisation and especially the finances. For members of a church this has real spiritual connotations too because they believe that the leadership are acting in accordance with godly principles and Biblical truth – even with the finances.
Even the financial management is meant to conform with spiritual principles.
It all comes to focus around the issue of Trust.
Even though there is real transparency for the finances in the organisation, we realise that not everyone in the membership can understand the finances and reports. Therefore it is incumbent on the financial management team to imbue the finances and accounting with best practices and systems so that the people can Trust the financial results.
So, why is it necessary for churches and NFPs to have their accounts audited or reviewed every year?
There are several reasons for this practice, most of which are necessary or required:
- it is generally a requirement of the church’s constitution or founding document from the denominational head office
- compliance with Australian government law
- so that there is an independent review of the finances that can inform the members
- effectively, the auditor or reviewer acts on behalf of the members. For the sake of transparency they must act independently from, and without influence by, the organisation’s management
- their report is addressed to, and available for, the members to read – note any questions and raise any issues
- provides a level of accountability to facilitate trust in the financial management
There are two options to have an Audit or have an Assurance Review of the accounts. Read an explanation of the difference HERE
Audit or Assurance review, which one is required?
Now is the opportunity to consider the simpler and cheaper alternative of the Assurance Review.
Have you stopped to consider why you go through the ordeal of an audit?
Many churches are wondering about their annual accounting audit
- It’s a nuisance getting all the paperwork together!
- How do we get all the docs to the auditor to check?
- We can’t work on our current accounts while the auditors are checking the old accounts!
- On-top-of-all-that, the audit fees seem high, where is the value?
Assurance Review is the alternative service to an audit and is available now for churches and smaller NFPs.
It is simpler and cheaper than the traditional audit. The Xero Accounting system is an ideal background for this review process.
The review team can directly access all the transactions, reports and supporting documents in your church’s Xero system.
See more details including scope, comparison between assurance review and audit: Read more
Many churches are finding that their annual accounting and audit fees are “quite expensive”. This is relative to their accounting which can be systemised and setup for non-accounting-trained people of the church, who are generally volunteers or a mix of staff and volunteers.
The whole year-end accounts close-off process is made easier, whether for audit or assurance review, by using processes and procedures that make it as easy as possible for your church to follow. Whether you are the treasurer, or admin/bookkeeper or a finance committee member wanting to make the role simpler.
One of our aims at Benkorp is to assist you to have Trust in the finances of your church or NFP. We can do this by assisting you with processes and systems that provide Transparency in transactions and reporting. We can provide you with an Assurance Review or assist you prepare for the audit.
Now is the time to contact us and discuss any of these points or find out how you can take advantage of this assistance: