The Audit

The term audited accounts means that the financial records of the club have been checked by someone with recognised accounting skills (usually a Chartered Accountant) as being a true and correct record of the financial operations of your club at that time.  

Appointing an auditor 

The records of all organisations do not necessarily have to be audited. It is advisable to be familiar with the rules/constitution of your club and its obligations if incorporated. Members of any club can usually pass a resolution requesting an audit. It is therefore wise to appropriately maintain the club's financial records.

Following the procedures outlined here may be of some assistance, but seek advice when you are unsure particularly from the auditor.

Seeking an accountant who is willing to audit the club's books on a voluntary basis is not unusual. Asking someone who is not a club member provides for an independent audit. Be sure to give that person plenty of time to audit the accounts, as they are busy people.

Some club rules require an honorary auditor to be appointed at the AGM. An Incorporated club is legally required to have the club's accounts audited prior to the AGM, for presentation acceptance by the membership. 

For incorporated clubs and depending on the complexity of the books, it may be possible to appoint an auditor such as a bank manager, council clerk or a chartered secretary, who is not from a registered company. Unincorporated groups requiring an auditor may approach their local bank manager or council clerk, who may do the work for nothing in support of the club. 

What the auditor needs

The auditor will require:

  • The books of account, consisting of the cash books written up and balanced for the year, and journals and club ledger if these records are maintained
  • Bank statements for the whole year
  • Copies of deposit slips and cheque butts
  • Receipt books containing the duplicates of receipts issued as well as cancelled original receipts. The auditor also needs to sight books of unused receipts
  • Vouchers for payments made, which must be placed in numerical sequence of cheques withdrawn
  • Access to ''paid' cheques from the bankers unless receipts have been obtained for all payments made
  • A copy of the last audited statement of accounts
  • The financial statements for the year now being subjected to audit, together with all supporting documentation
Depreciation

Clubs sometimes set an annual charge, included in membership, to cover depreciation so assets may be replaced in future. As depreciation is a non-cash cost it must be recovered out of income. It is a good idea to keep a register of the club's fixed assets.

Payroll

A payroll summary is an important set of records that should be passed on to the auditor. Keep this with the vouchers for the cheques written.  

Here is an example of a payroll where employees are paid by cheque:

Payroll 1

June current year

Name

Gross

Tax

Net

Cheque

G. William

$400

$128

$272

12345

K. Hunter

$220

$66

$154

12346

Where employees are paid in cash, write a cheque for the total net amount and cash it at the bank into the correct notes and coins to make up the separate payments.

Name

Gross

Tax

Net

W. Johnston

$400

$128

$272

R. Ashmen

#220

$66

$154

Totals

$620

$194

$426

Cheque No:

12301

436

 

 

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