Potential Changes On The Horizon In Financial Reporting For Not-For-Profits

The recent changes lifting the threshold for financial reporting for proprietary companies have highlighted the fact that many smaller unlisted public companies, whose reporting obligations have not changed, are subject to similar financial reporting and auditing obligations as large listed public companies under the Corporations Act.

These companies, in particular, companies limited by guarantee, are often not-for-profit in nature, and the financial reporting obligations have an onerous effect on their operations. On the other hand, not-for-profits often have a broader stakeholder base and greater public involvement, making public reporting an effective governance tool.