Boards that have crossed the threshold discussed in the previous article, and now genuinely need an external reviewer or auditor, often treat the engagement as a straightforward procurement decision. Get a quote, check the price, sign the letter. The reality carries more governance weight than that, both in who is legally entitled to do the work and in what a genuine audit actually examines.
Who can actually do the work
For a large registered charity, where the ACNC Act requires an audit, that audit must be carried out by a registered company auditor, an audit firm, or an authorised audit company, terms defined by reference to the Corporations Act 2001. This is not a title an accountant can claim casually. For a medium charity choosing a review rather than a full audit, the reviewer can be a registered company auditor or, more flexibly, a current qualified member of one of the relevant professional bodies, CPA Australia, Chartered Accountants Australia and New Zealand, or the Institute of Public Accountants. Whichever pathway applies, the reviewer or auditor must provide your charity with a signed, written independence declaration, a requirement under section 60-40 of the ACNC Act, confirming they meet the ethical independence standards set by the Accounting Professional and Ethical Standards Board.
What a genuine audit actually looks at
A common misconception treats an audit as a narrow check of the accounting figures alone. In practice, an ACNC audit or review can extend into governance practices, internal controls, and broader compliance, and auditors may reasonably request governance documents, board minutes, and policies, not just the ledger. This connects directly to the discipline this series has argued for throughout: minutes that genuinely capture decisions and reasoning, discussed in the previous quarter, are not just a legal record protecting individual directors, they are precisely the kind of document an auditor may reasonably ask to see when forming a view on whether your organisation's financial position and governance practices are genuinely sound.
An auditor who only checks the numbers is doing half the job. A board that only prepares the numbers for them is inviting exactly that narrow scrutiny, and missing the fuller value a genuine audit relationship can provide.
The rotation question, answered honestly
Unlike ASX-listed companies, which face specific statutory audit partner rotation requirements, there is no equivalent mandatory rotation rule imposed on ACNC-registered charities. This is worth stating plainly rather than assuming a rule exists that does not. That absence, however, is not a reason to leave the question unexamined. A long-standing auditor relationship brings genuine institutional knowledge of your organisation. It can also, over enough years, drift toward the same familiarity risk this series has raised elsewhere in different contexts, a relationship comfortable enough that genuinely hard questions stop getting asked. The board's Finance, Audit and Risk committee, discussed in the previous article, is precisely the body that should periodically and deliberately consider this question, rather than defaulting to indefinite tenure purely out of inertia.
- Confirm your auditor or reviewer holds the correct qualification for your charity's size tier, and obtain their independence declaration as a matter of course, not an afterthought.
- Prepare governance documents and minutes for the audit process with the same seriousness as financial records, since a genuine audit may reasonably examine both.
- Have the Finance, Audit and Risk committee periodically and consciously review the auditor relationship, including whether continued familiarity still serves the organisation or has quietly become a comfort the board hasn't examined.
- Treat findings from a review or audit as genuine input for governance improvement, not merely a compliance box, since the process is explicitly designed to surface areas for improvement, not just certify what already works.
An external audit or review, engaged properly and taken seriously, is one of the few genuinely independent checks a board receives on how well it is actually stewarding the organisation. Treating it as a procurement task rather than a governance relationship wastes most of its real value.
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Until next week,
Annie