CA ANZ and CPA Australia have lodged a joint submission on the Charities Amendment Bill. We have focused our feedback on the proposed amendments to the financial reporting requirements for very small charities. 

We do not support the proposed introduction of a power for the Department’s Chief Executive to exempt a class of “qualifying charitable entities” from preparing financial statements in accordance with the XRB standards, and instead requiring such entities to report “minimum financial information”.

• We believe the XRB’s project to revise the Tier 4 standard will result in sufficient simplification of the reporting requirements for very small charities
• The Department’s Chief Executive already has the power to exempt any charity from compliance with the financial reporting requirements
• It is not clear what constitutes a “class” of qualifying charitable entities
• It would be inconsistent with the policy decisions made for incorporated societies financial reporting based on donee status
• We envisage very small charities would struggle to comply with the requirement to report “minimum financial information” in the absence of guidance.

It is reasonable for any financial reporting concessions to be only for the smallest charities. If an exemption is to be given to very small charities, our preference is for the exemption (including criteria and thresholds) to be included within the Charities Act 2005. This would be consistent with the approach taken in Australia for “small” (as defined) ACNC registered charities.

We have also included several recommendations on the proposed amendments to the appeals framework.