Incorporated associations: review and audit by tier in Victoria and NSW

Victoria: three tiers, by total revenue

Section 90 of the Associations Incorporation Reform Act 2012 places each incorporated association in one of three tiers by total revenue, at amounts the regulations prescribe. Regulation 16 of the Associations Incorporation Reform Regulations 2023 prescribes $500,000 and $3,000,000 “for the financial year commencing on 1 July 2024” and each later year.

Total revenue is total income from all the association’s activities in its last financial year, before any expenses, including the cost of goods sold, are deducted (s 90(5), (6)). Consumer Affairs Victoria’s page applies the new tiers to a year “ending on or after 1 July 2024” and shows tier two as $500,000 to $3 million; the regulation’s words are the ones above, and an association at exactly $3,000,000 is still tier two, because tier three needs “more than” that amount.

Who reviews, who audits

A tier two review, and a tier one review when one is required, must be done by an “independent person” who is either a member of CPA Australia, Chartered Accountants Australia and New Zealand or the Institute of Public Accountants holding a current practising certificate, or a person the Registrar approves (s 96(1), (4)). Under s 96(5), no review is needed if the association’s rules require an audit under the Australian Auditing Standards and the statements are audited.

A tier three audit is done by an “independent person” who is one of these, in full (s 99(2)):

• a registered company auditor;
• a firm of registered company auditors;
• a member of one of the three accounting bodies above, holding a current practising certificate; or
• a person the Registrar approves under s 99(5).

Each of ss 93, 96 and 99 carries a penalty of 10 penalty units. Under s 3, an “independent person” must not be a committee member, an employer or employee of a committee member, in the same partnership as a committee member, or an employee of the association.

NSW: two tiers, and one audit

Under s 42 of the Associations Incorporation Act 2009, an association is Tier 1 if its gross receipts for the financial year last ended, or its current assets, “exceed such amount as may be prescribed by the regulations”. Clause 12(3) of the Associations Incorporation Regulation 2022 prescribes $500,000 for gross receipts and $1,000,000 for current assets.

Gross receipts are the total revenue in the income and expenditure statement; current assets are those held on the last day of the previous financial year, counting money in financial institutions, stocks and debentures, and not “real property or assets that may depreciate”. NSW Fair Trading says these thresholds increased on 27 June 2025, and cl 21A says they do not apply to a financial year that ended before 1 July 2024. Because the test is “exceed”, gross receipts of exactly $500,000, with current assets of $1,000,000 or less, leave an association in Tier 2.

A Tier 1 association must have its statements “audited in time for them to be submitted to the association’s next annual general meeting” (s 43(1)); penalty: 5 penalty units. Sections 46 to 49, which apply to a Tier 2 association, ask it to prepare statements, submit them to the AGM and lodge a summary; none of them asks for a review or an audit. Under s 51 the Secretary may direct any association to have all or part of its financial records audited.

Who may audit in NSW

Section 52(1) lists four, in full: a registered company auditor; an authorised audit company; “a member of a professional accounting body who holds a Public Practice Certificate or Certificate of Public Practice issued by the body”; or a person, or class of persons, the Secretary approves. Without the Secretary’s written approval, the auditor may not be someone who is, or within the last 2 years was, a member of the association, or an employee of, or provider of non-audit professional services to, the association, a committee member or its public officer (s 52(2)).

When the association is a registered charity

NSW, from 1 April 2026

Section 53 lets the Secretary, by written notice, and the regulations exempt associations from Part 5’s requirements. Made under s 53(3), clauses 13A and 14A exempt a Tier 1 association from ss 43 to 45 of the Act, and a Tier 2 association from ss 47 to 49, if, in relation to the relevant financial year, all four of these hold:

“(a) the association

(i) is an ACNC registered entity, and

(ii) does not report to the Australian Charities and Not-for-profits Commission as part of a reporting group under the Commonwealth Act, Subdivision 60-G, and

(iii) gives all statements and reports for the financial year as required by the Commonwealth Act, Division 60, and

(b) the information in the statements and reports is publicly available on the ACNC Register to the extent required by the Commonwealth Act.”

Associations Incorporation Regulation 2022 (NSW), cl 13A and cl 14A

NSW Fair Trading dates the change from 1 April 2026; cl 21B says it does not reach a financial year that ended before then. The clauses do not name s 51, the Secretary’s power to direct an audit.

Victoria

Consumer Affairs Victoria says an association that is also an ACNC-registered charity need not lodge an annual statement with it or pay the fee, and that “This exemption only applies to your annual reporting obligations to us.” The association still prepares its financial statements and presents them at the AGM, and the exemption does not cover a charity the ACNC has approved to withhold financial details or reports from its register, or to form part of a reporting group. The Act lets the Minister, by Order published in the Government Gazette, exempt associations from “one or more of the requirements under section 102” (s 103(4)); the review and audit duties are in ss 93, 96 and 99.

None of the sources read for this guide says whether one review or audit can meet both a state Act and the ACNC Act, so no rule on that is given here. The ACNC’s sizes are in the guide to charities, review or audit.