48Audits of tier 3 incorporated association

48 Audits of tier 3 incorporated association (1) This section applies to an incorporated association (a tier 3 incorporated association) that: (a) is an incorporated trading association; or Associations Act 2003 34 (b) has gross receipts, at the end of a financial year of the (c) has gross assets, at the end of a financial year of the (d) is an incorporated association for which a declaration under section 101 has been made. (2) The association must ensure its accounts are audited by: (a) for an incorporated association described in subsection (1)(a), (b) or (c) – a person who holds a public practice certificate issued by an accountants body; or (b) for an incorporated association described in subsection (1)(a), (b) or (c) – a person who is, or is a member of a class of persons, approved by the Director; or (c) for an incorporated association described in subsection (1)(d) – a person who is registered as an auditor under the Corporations Act 2001. (3) If an incorporated association contravenes subsection (2), each (4) The auditor must report to the association on: (a) the statement of accounts required to be laid before the association at the annual general meeting; and (b) the association's accounting records; and (c) other records relating to the accounts or accounting records. (5) The auditor must state in the report: (a) whether the accounts are in the auditor's opinion properly drawn up: (i) so as to give a true and fair view of matters required by section 42(2) to be dealt with in the accounts; (ii) in accordance with this Act; and (iii) in accordance with applicable Australian accounting standards; Associations Act 2003 35 (b) if, in the auditor's opinion, the accounts have not been drawn up in accordance with the applicable accounting standards: (i) whether, in the auditor's opinion, the accounts would, if drawn up in accordance with the applicable accounting standards, have given a true and fair view of the matters required by section 42(2) to be dealt with in the accounts; (ii) if, in the auditor's opinion, the accounts would not, if so drawn up, have given a true and fair view of those matters – the auditor's reasons for being of that opinion; and (iii) if subparagraph (ii) does not apply – particulars of the quantified financial effect on the accounts of the failure to so draw up the accounts; (c) if, in the auditor's opinion, there are reasonable grounds to believe the association will be able to pay its debts when they fall due; (d) the defects or irregularities in the accounts identified during the audit; (e) the matters that, because they are not set out in the accounts, prevent a true and fair view of the accounts being obtained; and (f) if the auditor is not so satisfied about a matter referred to in paragraphs (a) to (c), the auditor's reasons for not being so satisfied. (6) The auditor must: (a) form an opinion as to whether: (i) the auditor has obtained all the information and explanations the auditor required; and (ii) proper accounting records and other records have been kept by the association as required by this Act; and (b) state in the auditor's report particulars of a deficiency, failure or shortcoming in relation to a matter referred to in paragraph (a). (7) The auditor's report: (a) must be attached to or endorsed on the accounts; and Associations Act 2003 36 (b) must, if a member so requires, be read before the association at the annual general meeting; and (c) may be inspected by a member at any reasonable time. (8) The auditor, or an agent of the auditor authorised by the auditor in writing for the purpose, is entitled: (a) to attend a general meeting of the association and to receive all notices of and other communications relating to a general meeting that a member is entitled to receive; and (b) to be heard at a general meeting that the auditor attends on a part of the business of the meeting that concerns the auditor in the capacity of auditor and is entitled so to be heard even if the auditor retires at that meeting or a resolution to remove the auditor from office is passed at that meeting. (9) If the auditor becomes aware that the committee has not complied with section 43 relating to the presenting of accounts before the annual general meeting of the association, the auditor must immediately: (a) inform the Director by written notice; and (b) if accounts have been prepared and audited – send to the Director a copy of the accounts and the auditor's report on the accounts. (10) Except in a case to which subsection (9) applies, if the auditor, in the course of the performance of duties as auditor, is satisfied: (a) there has been a contravention of this Act; and (b) the circumstances are such that in the auditor's opinion the matter has not been or will not be adequately dealt with by comment in the auditor's report on the accounts or by bringing the matter to the notice of the committee of the association; the auditor must as soon as practicable report the matter to the Director by written notice.