The Australian Accounting Standards Board (AASB) has weighed in on the complexity of the financial reporting regime for Australian charities in a new report, describing it as “overly complex and inconsistent” and saying it “fails to promote the sector’s accountability or efficiency”.
The research, Financial Reporting Requirements Applicable to Charities, found that despite ongoing simplification efforts, serious issues with the current financial reporting regime remained, with the result that there was “no level playing field for charities”.
It found while the charity regulator, the Australian Charities and Not-for-profits Commission (ACNC), had succeeded in harmonising financial reporting across some states and territories, “the underlying issue related to the reporting framework within which charities are required to lodge”.
The research comes as a precursor to the federal government’s planned review of the ACNC’s legislation which is due to start in December.
In reviewing charities’ financial reporting requirements in Australia, New Zealand, United Kingdom, Hong Kong, Singapore, South Africa and Canada, the AASB’s research found Australia had the most complex regulatory environment for charities.
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