Auditing of Branch Financial Accounts

Introduction

Each branch maintains bank accounts, usually a current account and a savings account, and keep accounting records of the transactions passing through those accounts. At the end of each financial year, branch treasurers prepare accounts summarising the financial transactions during the year, and these accounts are submitted for approval by branch members at the branch AGM.

Not all branch accounts are audited.

Recommendation

Although not a formal requirement in the Institute’s Bye-Laws, it is considered to be wise and prudent business practice for these annual accounts to be reviewed, checked or audited by an independent person, i.e. a person other than the treasurer.

This independent person is usually another member of the branch committee or, preferably, a third party with ideally an accounting background. As far as is known, no branches appoint a paid auditor.

It is customary for the auditor to sign and date a declaration on the annual accounts to the following effect:

“I hereby certify that the accounts give a true and fair view of the state of the branch’s affairs as at ……….(date) (last day of financial year).”

It is suggested that the nomination of an auditor should be approved from one year to the next by the branch membership at the branch AGM.

Please contact the Institute’s Treasurer, Russell Mason, for any further clarification.