Illustration of man at computer juggling financial tasks

Australian charities are burdened with a financial reporting regime that’s overly complex and inconsistent and which fails to promote the sector’s accountability or efficiency, according to research undertaken by the Australian Accounting Standards Board (AASB).

Australian charities make up a significant sector of Australia’s society and economy, with net assets of more than $180 billion and income of $134 billion.

In 2012, the Australian Charities and Not-for-profits Commission (ACNC) was set up to promote the reduction of unnecessary regulatory obligations on the sector. While the ACNC has succeeded in harmonising financial reporting across some states and territories, the AASB contends that the underlying issue relates to the reporting framework within which charities are required to lodge.

In reviewing charities’ financial reporting requirements in Australia, New Zealand, United Kingdom, Hong Kong, Singapore, South Africa and Canada, AASB’s research found Australia has the most complex regulatory environment for charities.

“Australian charities are covered by at least 18 sets of regulation and ten regulators at federal and state level, with many charities having to answer to more than one regulator,” said AASB Chair Kris Peach. “Very little of that regulation is consistent and much of it involves different reporting thresholds and requirements.”

“There is no level playing field for charities,” said Ms Peach. “Like charities have to produce different reports depending on their location, entity type and historic reporting choices. As a result, reports are unnecessarily complex and potentially irrelevant to donors and other stakeholders.”

Read more on the AASB website


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