Not every business or organisation in Australia requires an audit. However, certain Acts and Regulations mandate audits for specific entities. Depending on their size, structure or nature, some entities are legally required to have their financial statements or trust accounts audited.
This article outlines the various categories of entities that are required to be audited under Australian law and regulations.
| Entity Type | When is an Audit Required? |
| Public Companies including listed entities | Under the Corporations Act all public companies are required to have their financial reports audited. |
| Large Proprietary Companies | Under the Corporations Act, companies that meet at least two of the following thresholds are classified as “large” and are required to have their financial reports audited annually:
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| Small Foreign-Owned Companies | Companies that are controlled by a foreign Company/Group, and do not have an ASIC exemption are required to be audited. |
| Charities and Not-for-Profit Organisations | Charities registered with the Australian Charities and Not-for-profits Commission (ACNC) are subject to audit obligations based on their annual revenue:
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| Incorporated Associations (State– based legislation) | Incorporated Associations registered with their local State or Territory regulator are subject to audit obligations based on varying, specific factors. Each State and Territory has their own thresholds for what defines a large association. |
| Registered Schemes & Financial Services Licensees (AFSL Holders) |
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| Aboriginal Corporations | Under the Corporations (Aboriginal and Torres Strait Islander) Act 2006, the following corporations are required to have their financial reports audited annually:
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| Trust Accounts | Entities who manage client funds often operate trust accounts, which must be audited in accordance with their relevant professional or industry body. This includes:
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| Self-Managed Superannuation Funds (SMSFs) | All SMSFs must be audited annually irrespective of size or activity in relation to both:
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Voluntary audit
An entity can choose to undertake a voluntary audit, even if it is not legally required. A voluntary audit can provide many benefits, including:
- Identification of weaknesses or breakdowns in internal controls
- Strengthening stakeholder confidence and trust
- Early identification of current and emerging risks
- Identification of accounting errors, whether from mistakes or misapplication of Accounting Standards
For businesses, a voluntary audit can provide peace of mind, strengthen investor and lender confidence, and support future growth by showing that financial reporting is both accurate and well-controlled.
Conclusion
Audit requirements in Australia vary depending on an entity’s structure, size, and activities. Whether mandatory or voluntary, an audit enhances transparency, builds trust with stakeholders, and ensures compliance.
In addition to the categories above, certain entities may also require audits (e.g. public and private ancillary funds, co-operatives, finance/loan agreement conditions, Coal Mining Long Service Leave, IATA travel agencies, franchise marketing funds). If you are unsure whether your entity requires an audit, we are here to help.
