Accounting and auditing fees
Posted on 21 December 2016
In response to changes in the financial reporting for registered charities, you may find that some accounting and auditing professionals have increased the fees they charge for their professional services.
We know that funds are limited in the not for profit sector, and therefore we have some suggestions for you to ensure you get the best value for money from the services you purchase:
- Very important – make sure that your accountant or auditor is aware that you are a registered charity, and therefore need to report using the new reporting standards for not for profit entities. We have seen cases where the client has not advised the accountant that they are a charity and the accounts were prepared under the for-profit standards. This means re-work and potentially more cost.
- Ask for an estimate of costs – if there is an increase, find out if this is likely to be a one-off transitional cost, or if the fees will be permanently increased.
- Be clear on the scope – some pieces of the Performance Report for Tiers 3 and 4 do not need to be prepared by an accountant. For example, the Entity Information and Statement of Service Performance could be prepared in-house. These can also be excluded from a review or audit if there is no legal requirement to review or audit (organisations with less than $500k expenditure).
- Ask if there is anything you can do to keep the costs down. For example, if you are not already using accounting software with an inbuilt Performance Report template, could you consider switching to one? Or, can the accountant or auditor specify how they want you to present your records to them to minimise the amount of work they have to do?
- Have a de-brief with your accountant or auditor after they have completed the work. Find out if they found anything hard to manage and what you can do for next time to streamline the process.
The Tier 4 standard in particular has been developed so that the Performance Report can be completed without the assistance of a professional. We have many resources on our website to help you. We also have our newly published Tier 3 and Tier 4 Guidebooks to help you through the process of completing your Performance Report using the optional XRB template. These also cover submitting an annual return to Charities Services which you do once you have prepared your Performance Report. In addition, you can call us on 0508 CHARITIES or e-mail us at email@example.com if you have any specific questions.
If you have particularly complex transactions, or really don’t feel confident preparing your report, then we would suggest you seek professional help, at least for the first year of this new reporting format.