Does your Church need an audit or a review?

The three charity sizes, and what each must do

The ACNC sorts registered charities into three sizes by annual revenue, and each size carries a different financial reporting obligation:

• Small charity, annual revenue under $500,000. No requirement to have the financial report reviewed or audited. Submitting a financial report is optional, though often still worthwhile.

• Medium charity, annual revenue of $500,000 or more but under $3 million. The financial report must be either reviewed or audited.

• Large charity, annual revenue of $3 million or more. The financial report must be audited.

These thresholds have applied since the 2022 reporting period. If your Church last checked its obligations some years ago, the older, lower thresholds no longer apply, and your Church may have shifted category without anyone noticing.

Basic religious charities are a special case

Many Churches qualify as a basic religious charity, and that status changes the picture entirely. A basic religious charity is not required to submit annual financial reports to the ACNC at all, whatever its revenue, and is exempt from the ACNC governance standards. It is a genuine concession, but it comes with strict conditions, and losing any one of them, for example by becoming incorporated or receiving certain government grants, can strip the status away. It is worth confirming that your Church truly qualifies rather than assuming it does, which is where solid governance foundations for your Church earn their keep.

Review or audit: what is the difference?

For a medium Church that gets to choose, it helps to know what you are choosing between:

• A review gives a lower level of assurance. The reviewer states they are not aware of anything suggesting the financial report is materially wrong. It is less work and costs less.

• An audit gives a positive opinion. The auditor examines evidence in more detail and forms a view on whether the report meets the required standards.

A review is often enough for a medium Church. But your own constitution, or a funding agreement, can require a full audit even when the ACNC would happily accept a review. Always check your governing document before assuming the minimum applies, and if you would rather not untangle it alone, our Church accounting team does this every day.

A quick way to know where you stand

Start with your revenue for the year and find its band. Then check whether your constitution or any funding contract lifts the bar higher than the ACNC minimum. If you are a basic religious charity, confirm you still meet every condition. Those three checks will tell almost any Church exactly what it needs to do.

Thresholds move, Churches grow, and constitutions say things boards forget. If any of that sounds familiar, reach out and we will help you pin down exactly what your Church needs, and arrange the review or audit if one is required.