Understandability and Transparency of the Financial Statements of ...

change and they‟re doing a good job donating most of their time to the local
parish or whatever. (Interviewee 18 A)
The audit cost ten times what it cost the last time and [the Board] gritted its‟
teeth. I told them they could consider themselves thankful and fortunate that for
the last 10 years they‟ve had an audit done, and that nothing‟s gone wrong in
those 10 years, because in fact we had an auditor who had the nose and knew
the things that really mattered. Practice Review [NZICA‟s monitoring
committee] started to hound him and he eventually just chucked it in, he said it‟s
not worth it. (Interviewee 11 BTA)
Not using auditing standards led to audits where the auditor had qualified the audit
report because they could not sight every single asset rather than just sighting the
material ones. No questions were asked as to whether there were any controls over these
assets, which should have been the focus of auditing PPE:
Now I personally don‟t think that an auditor has to go and sight every jolly fixed
asset. I never did. That‟s just crap. So that‟s what the previous one did. And I
mean, frankly if she wants to put that qualification [on the audit report] I frankly
couldn‟t care less. (Interviewee 14 MA)
The other extreme was where auditors never visited the charity, as seen in the
following:
No, well I think my inclination was to go and actually have a meet with this guy
[the Auditor] anyway and talk, rather than just fill out forms and never actually
meet the guy. (Interviewee 21 MT)
Several interviewees were very grateful that someone was auditing their accounts,
seeing an audit just as a funders‟ requirement rather than appreciating the benefits of a
„properly conducted‟ risk-based audit which identifies risks that the charity needs to
mitigate:
A well meaning chap [the auditor], who was very slow and there was lots of
typos from the firm that was doing the writing up. And now, he‟s very sick, and
basically retired. Now I‟ve gone to another one and he‟s very slow. I sent the
first lot [audited financial statements] back with all the typos and the fact that
they left a column out (Interviewee 23 T).
This interviewee wanted an audit report as it was a requirement of her Board and
funders. The auditor restated her figures into a different format that interviewee 23 did
not understand so she provided her Board with her original (unchanged) financial
statements not the audited financial statements.
This lack of understanding was identified by Fisher (2007a, p. 23)
In my experience, many within the not-for-profit sector do not truly understand
what an audit or a set of generally accepted accounting practice compliant
financial statements are.
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