Audit and review requirements

Updated November 2025

If your charity has high operating costs, you may be legally required to have your Performance Report either audited or reviewed by a qualified auditor.

Statutory thresholds

Your charity must meet audit or review requirements if your total operating expenditure was:

  • over $550,000 (medium) -  you must have either a review or an audit by a qualified auditor
  • over $1.1 million (large) - you must have an audit by a qualified auditor

Charities that are required by statute to have an audit or review will also have their non-financial information (e.g. service performance reporting) audited or reviewed.

What's the difference between an audit and a review?

  • An audit provides a higher level of assurance and involves a more detailed examination of your Performance Report.
  • A review provides limited assurance and involves fewer procedures than an audit.
 

Audit

Review

Level of assurance

A reasonable or high level of assurance about whether the financial statements as a whole are free from material errors or fraud.  Reasonable or high assurance is not absolute assurance.

Limited assurance about whether the financial statements as a whole are free from material errors or fraud. Limited assurance is less than reasonable assurance.

Report provided

Independent Auditor's Report

Opinion is expressed in a positive form, e.g. "The financial statements are free from material misstatement."

Independent Review Report

Conclusion is expressed in a negative form, e.g. "Nothing has come to our attention that causes us to believe that the financial statements are not free from material misstatement."

Nature of procedures

Procedures normally involve detailed tests of accounting records using techniques such as inspection, observation, confirmation, recalculation and re-performance, as well as inquiry and analytical review.

Procedures are primarily based on inquiry and analytical review.

Assurance standards

Auditing Standards - All 36 ISAs (NZ)

Review Standards - Review Standards: ISRE (NZ) 2400 and NZ SRE 2410

What gets audited or reviewed?

If your charity meets the legal thresholds, the audit or review will cover:

  • Financial information: income, expenses, assets and liabilities.
  • Non-financial information: including your Entity Information and Statement of Service Performance.

What if our rules say we need an audit or review, but we're below the threshold?

If your charity’s operating expenditure is less than $550,000, you are not legally required to have an audit or review. However, you may still need one if:

  • a review or audit is required by your charity’s trust deed, constitution, or governing rules
  • a funder or grant provider requests one.

In these cases:

  • you can choose who performs the audit or review (unless your rules require a qualified auditor)
  • you can decide whether to include non-financial information, but the auditor's report must clearly state what was and wasn't included in the review or audit.

Should you include non-financial information if you are below the threshold?

Before deciding, consider the following:

  • Check your rules
    Review your governing documents. Do they say what must be audited or reviewed?
  • Consider your stakeholders
    Will funders, banks, or other users expect non-financial information to be included?
  • Talk to your auditor early
    Agree on the scope of the audit or review before your financial year ends to avoid misunderstandings.

Who is a qualified auditor?

For statutory audits or reviews, a qualified auditor must meet the requirements under sections 35 and 36 of the Financial Reporting Act 2013.

You can find qualified auditors through:

Where to find more information

Download the External Reporting Board's booklet Small Charities’ Assurance Needs.