Future in focus
ACNC Repeal Bill – an uncertain outcome
In early December, the second reading debate in the House of Representatives adjourned with no vote taken on the ACNC Repeal Bill. The debate will continue at some stage in the new year. The first parliamentary sitting week is the last week of February. The bill to abolish the commission was not accompanied by alternative arrangements for regulating charities.
The federal government's plan to abolish the ACNC faces an uphill battle, the Senate unlikely to support the repeal.
A Pro-Bono Australia survey has shown that four out of five charities support keeping the ACNC, and more than 40 charities have signed an open letter to the prime minister urging him to retain it.
More than 80 per cent of submissions to a Senate inquiry supported keeping it, and lobbying is expected to intensify next year.
Drafts of new financial-reporting standards imminent
The Australian Accounting Standards Board (AASB) has made decisions about how to determine when a contract with a customer includes a donation that should be accounted for separately. It expects that an exposure draft will be issued in the first quarter of next year.
The AASB has also made decisions about service-performance reporting and expects an exposure draft to be issued in the fourth quarter of 2015.
New audit rules imminent
The Auditing and Assurance Standards Board will in the first quarter of 2015 approve a guidance statement on grant acquittals, multi-scope engagements, and revised standard ASAE 34XX 'Assurance Engagements on Controls', an operating date for engagements commencing on or after 1 January 2016.
APRA releases draft guide on super fraud risks
The Australian Prudential Regulation Authority (APRA) has released for consultation a draft guide on good fraud-risk management practices for Registrable Superannuation Entity (RSE) licensees.
'Prudential Practice Guide SPG 223 Fraud Risk Management' (SPG 223) outlines prudent practices on managing fraud risk, and focusing on current and emerging fraud-risk factors affecting the superannuation industry.
The draft is to be read with APRA's prudential standards and other guides relevant to fraud risk management – in particular, prudential standard SPS 220 'Risk Management' and prudential practice guide SPG 220 'Risk Management'.
It addresses the development and implementation of a fraud-risk management framework – including planning and resourcing, fraud prevention, fraud detection, fraud response, and monitoring and review – and superannuation-specific fraud risks (investment and outsourcing risks). The guide includes two appendices addressing fraud risks and fraud controls.
Associations bill tabled in WA parliament
Revised legislation introducing financial-reporting obligations for incorporated associations has been tabled in the Western Australian parliament. The 'Associations Incorporations Bill 2014' will replace the 'Associations Incorporation Act (1987)' and introduces a three-tiered structure for annual reporting and assurance obligations based on an association's size. The legislation is similar to counterparts in other Australian states.
The new legislation will modernise administrative processes for associations, including setting out clearer explanations of committee members' duties and revised rules for dispute resolution and association trading. The bill also includes a three-year transition period to allow associations time to amend their constitutions. Model rules will be released for comment.
The new reporting obligations require:
- Tier 1 entities with revenues of less than $250,000 to prepare financial statements on either a cash or accrual basis. The financial statements need be audited or reviewed only if required by a member vote or at the commissioner's direction
- Tier 2 entities with revenues between $250,000 and $1,000,000 must prepare financial statements in accordance with accounting standards and have these reviewed or audited if required by member vote or the commissioner's direction;
- Tier 3 entities with revenues of more than $1,000,000 must have their financial reports audited.
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