Auditors
If your corporation is required to lodge a financial report, it is also required to lodge an audit report.
For this, you will need an auditor.
An auditor is an independent professional who checks a corporation's financial records to make sure they are accurate and comply with legal requirements.
What does an auditor do?
For Aboriginal and Torres Strait Islander corporations, an auditor:
- examines the corporation's financial reports
- checks whether the corporation has complied with financial reporting requirements under the CATSI Act and the Australian Accounting Standards
- provides an audit report stating whether the financial reports give a true and fair view of the corporation's financial position.
The auditor does not prepare the accounts or run the corporation. Management and directors are responsible for the financial records; the auditor independently reviews them and provides a report with their opinion.
Finding an auditor
The board is responsible for finding suitable auditors. Members then make the decision on who to appoint as the auditor and agree to their fee at the corporation’s annual general meeting (AGM).
Where to look
You can find an auditor by:
- searching professional accounting body directories, such as:
- asking other corporations for recommendations
- asking your accountant or bookkeeper for a referral.
Who can be an auditor
An auditor must be eligible and independent.
Auditor eligibility
Your corporation’s size and income determines who can be its auditor.
| Corporation size and income | Eligible auditor |
Large corporations Small and medium corporations with a CGOI* of $5 million or more | A registered company auditor An audit firm that has at least one member who is a registered company auditor An authorised audit company |
Medium corporations with a CGOI* of less than $5 million Small corporations with a CGOI*between $100,000 and $5 million | The options above or:
|
* Consolidated gross operating income (CGOI) is the total value of the money made by the corporation and any entities it controls.
Search the person or company’s name in the ASIC Professional Registers to check if they are a registered auditor.
Auditor independence
Auditors must be independent of the corporation. They must not have any financial or personal relationships with the corporation.
This is important so they can give an unbiased opinion on the financial health of the corporation.
Other desired skills and experience
Expertise
Different auditors specialise in different types of companies and industries. You want to look for an auditor who:
- is familiar with the requirements of the CATSI Act
- works with organisations of a similar size
- regularly works with organisations in your industry
- is familiar with charities and deductible gift recipient (DGR) status (if your corporation is a charity).
Able to meet your reporting deadline
Make sure your auditor can provide their report in time for your corporation to lodge its reports before 31 December.
Do they have someone else who can step in if something unexpected happens?
Good communication
A good auditor should be able to explain the audit – its findings, problems and recommendations – in a way anyone can understand. They should be happy to do so.
Make sure your auditor is willing to attend the corporation’s AGM to explain the audit to members.
Cost
What an audit costs can be very different between corporations. It will depend on your corporation’s size, how complex the audit is, and the experience of the auditor.
Cheaper is not always better, but neither is the most expensive if you are paying for more service than you need.
Choosing an auditor
Ask more than one auditor for a quote so you can compare them. They should be able to give you a detailed proposal that tells you:
- what is included in the audit
- what is not included in the audit
- their experience
- when the audit will be done
- how much it will cost.
Questions to ask a potential auditor
- Are you eligible to audit our corporation?
- Are there any conflicts of interest that could affect your independence?
- Have you worked with Aboriginal and Torres Strait Islander corporations before?
- Do you understand our corporation and the environment we operate in?
- Can you explain financial information in plain language for directors and members?
- What information will you need from us to complete the audit?
- What are your fees and how are they calculated?
- When can you complete the audit?
Appointing an auditor
- The board should evaluate the proposals and present them to members.
- Members make the decision on who the auditor is and how much they will be paid. They do this by passing a resolution at your corporation’s AGM or sooner if needed.
- Notify ORIC within 14 days – sign in to myCorp to tell us who your corporation appointed as auditor.
If members do not appoint an auditor at the AGM, the directors can appoint one.
Auditor resignation
If your auditor resigns:
- notify us of their resignation within 14 days
- seek a new auditor quickly so your corporation continues to meet its obligations under the CATSI Act – see ‘appointing an auditor’ above.