Audit FAQs

Why do I need an audit?

	Audit	Review
Expenditure	Charities with greater than $1.1m annual operating expenditure in the prior two financial years must have an audit.	Charities with greater than $550k annual operating expenditure in the prior two financial years must have their financial statements either audited or reviewed.
Organisation rules (e.g. trust deed, constitution, or charter)	A charities rules may specify an audit. A charities constitution must be followed even if there is no statutory requirement.	A charities constitution may specify an audit or review. A charities constitution must be followed even if there is no statutory requirement based on the expenditure thresholds.
Funders	Some funders require charities to have their accounts audited or reviewed in order to secure funding or fulfil accountability obligations.

What can I expect in an audit engagement?

During the course of the audit engagement I will seek to understand the organisation and the operation of the internal control environments. Based on this understanding, an assessment of risk of material misstatement is created and procedures to address the risks are designed. These procedures will usually consist of a sample of transactions from each material financial statement line being tested using longstanding audit methodology. The nature and extent of the tests depend on the risks previously established.

How is the first year engagement different from subsequent year engagements?

Significantly more time is required in the first year to establish and understanding of your organisation, its internal control environment and assess the risks of material misstatement. Once this initial assessment has been performed, it can be rolled forward, resulting in less time commitments for the auditor and the client in subsequent years.

How long will my audit or review take?

Depending on the extent of required communication, and any required changes identified, you can generally expect a review to take two weeks, and an audit to take three weeks. This is a guideline only, as the time will be different for every engagement. Timely communication and provision of information requests is key to a timely and efficient engagement.

What is limited assurance and reasonable assurance?

Limited assurance is framed in a negative sense, for instance: "based on the procedures performed, nothing came to our attention to indicate that the financial statements do not present fairly in all material respects."

Comparatively, reasonable assurance is framed in a positive sense, for instance: "Based on the procedures performed, in our opinion the financial statements present fairly in all material respects"

0800 MATLEY (0800 628 539)

Matley Audit Limited
150 Grantham Street
Hamilton Central, Hamilton
PO Box 10318, Hamilton 3241