Background

All churches require that their accounts and financial statements are checked by an independent review process at least once every year.

Although this check has traditionally been provided through an Audit Report, there is an alternative available which provides a similar but reduced outcome – the Independent Assurance Practitioner’s Review Report.

An audit report is provided by an Auditor and the Independent Assurance Practitioner’s Review Report is provided by an Assurance Practitioner.

The background and rules for engagement and practices for the Assurance Practitioner are covered by Standard number ASRE 2400, the Australian Government’s Accounting Standards Review Board.

Explanation of Assurance Review
The difference between an assurance report and an audit report are:
• less detail checking of individually processed transactions
• fees are less expensive for the Assurance Practitioner than the Auditor

Comparison

Assurance

Audit

Meaning

Evaluation of the financial accounts
• to state that the accounts are free from material misstatement
• to state whether, on the basis of the procedures described, anything has come to the reviewer’s attention that gives cause to believe that the Financial Statements are not presented fairly, in all material respects

 

Systematic and technical
examination of the books/system of accounts,
2 objectives:
1. to determine whether the financial statement represents true and fair view
2. to detect if there are any errors or frauds, in the financial accounts of the client.
Requires checking (by sample) of transactions and supporting documentation

Assurance level

Moderate assurance

Reasonable assurance

Cost

Comparatively low

High

Church Board’s/Council‘s responsibility for the annual Financial Statements
The appropriate Boards or Councils of the church/parish are responsible for the preparation and fair presentation of the Financial Statements in accordance with their Constitution and related Rules. This responsibility includes establishing and maintaining internal controls relevant to the preparation of the Financial Statements that are free from material misstatement, whether due to fraud, error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Limitations of Accounts Review & Audits
Because of the inherent limitations of an audit and accounts reviews, together with the inherent limitations of any system of internal control, there is an unavoidable risk that some material misstatement, fraud or irregularity may not be detected, even though the audit is properly planned and performed in accordance with Australian Auditing Standards. This is particularly the case in respect of receipts where the scope of an audit or review is restricted to the amounts recorded in the accounts of the church.

The Process of an Assurance Review as provided by Benkorp
1.  Benkorp requests specific information
2.  Board/Council provides the information as required
3.  Benkorp reviews the information provided and requests further information as required
4.  Board/Council provides the further information
5.  If required, corrections are made to the accounts by the church or Benkorp as agreed. Corrections made by Benkorp are chargeable*
6.  After corrections are completed Benkorp will provide an “Independent Assurance Practitioners Review Report”
7.  Designated officers of the Board/Council are to sign the financial reports and present to the Church’s AGM.

Fee
Benkorp’s fee for the accounts Assurance Review is $600 + GST and is payable within 14 days of the invoice date.

*Additional Fees excl GST
Benkorp can provide accounting corrections, assistance or training if required for additional fees of $135 per hour + GST