It is the responsibility of the management committee to provide the financial statements. The role of the auditor or reviewer is to give a professional and independent on these financial statements.  The review or audit of an association’s financial report can ensure greater accountability to the members and provide an assurance that all funds received by the organisation have been correctly accounted for.

The committee should not rely on the auditor to find all errors in the statements and identify any fraud. It remains the committee’s responsibility to pay close attention to the association’s financial statements at all times.

The auditor's task is to provide a professional opinion on the state of the financial affairs of the association. Auditors have a legal responsibility for their opinion and can be held liable for negligence if the audit is not completed according to professional standards, or for damage to the association as a result of negligence.

What if the audit report is unfavourable?

There is always the possibility an auditor may present a critical report identifying areas that the association needs to address. To ignore an auditor's report is likely to place the association at risk.

If the association is unsure what the auditor is saying its should seek clarification as irregularities in the financial statements could occur for a number of reasons including:

• a lack of understanding in preparing financial statements;
• a lack of understanding in assessing financial statements;
• poor controls over money in and out; or
• dishonesty.

If problems suggesting dishonesty are found in the financial records, the association should obtain prompt legal advice and attend to any immediate matters such as freezing accounts, securing assets, investigation, contacting the police and/or the insurer.