Audit Lowe Down – What Should Be on the Board/Management Committee Agenda for NFP and Smaller Entities?
Lowe Lippmann Chartered Accountants
What Should Be on the Board/Management Committee Agenda for NFP and Smaller Entities?
We are fast approaching the end of the calendar year – the second most common reporting date for entities in Australia. Board and Management committees (Boards) of not-for-profits (NFPs) and small entities will be considering their annual reports and the 2025 outlook and as part of this project, it will be time to ensure the Board attention areas are appropriate.
Boards should focus on current and emerging risks to ensure their organisations remain resilient and effective – the normal items of financial management, governance, and strategic planning remain relevant, however other key matters which should be included are:
- Cybersecurity: Ensure your organisation is protected against increasing cyber threats and has robust data protection measures in place, including knowing what data is collected and retained by the organisation.
- Climate Risk: Evaluate how environmental changes impact operations, funding, and long-term sustainability and whether there is impact from the mandatory climate-reporting risk regime on your suppliers which may impact you.
- Diversity & Inclusion: Ensuring your governance and decision-making reflect the community your organisation serves, and the appropriate voice is being heard.
- Digital Transformation: Discuss emerging technologies for operational efficiency and addressing any digital gaps. Ensure appropriate policies for the use of AI are in place.
- Staffing and Succession Planning: Regularly review staffing levels, development opportunities, and establish succession plans for key roles, such as the Chair of the Board, CEO or General Manager.
- Geopolitical situation: Consider any likely impacts from the current world uncertainty and overseas elections including supplier and beneficiary locations, changes in exchange rates and interest rates.
Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.
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New Tax Agent Obligations from 1 July 2025 From 1 July 2025, “small” firms of tax practitioners (with 100 or less employees) must ensure they are complying with the eight new Code of Professional Conduct obligations from the Tax Practitioners Board ( TPB ). These new Code obligations were introduced by the Government under the Tax Agent Services (Code of Professional Conduct) Determination 2024. The new Code obligations have already commenced for large tax practitioners (with over 100 employees) from 1 January 2025. As tax agents, Lowe Lippmann Chartered Accountants are committed to upholding our professional and regulatory obligations, including with the Tax Agent Services Act 2009 which includes the Code of Professional Conduct as regulated by the TPB.
Related parties – what should I consider in identifying them? Related party disclosures is an area that is receiving more scrutiny from stakeholders in both the for-profit and the not-for-profit space. Disclosure of transactions that have occurred with related parties are important since the terms and conditions are often different from those with unrelated parties, in some instances the transactions may have occurred for much lower or even nil consideration. Often one of the biggest challenges for compiling the disclosures is working out who is a related party of an entity. The definition of related parties in AASB 124 Related Party Disclosures is detailed, however we have summarised the definition into various elements below. a. Think about entities who might be related to the reporting entity i.e.: i. through control or significant influence, ii. by the existence of material transactions or iii. dependence on technical information or personnel provided by them. b. Think about people who might be related to the reporting entity, i.e.: i. Key management personnel, including all directors. ii. Close family members of key management personnel (e.g. spouse, child). c. Think about entities that the people identified in b. might control or significant influence, i.e.: i. Family businesses ii. Businesses which a close family member controls (i.e. senior partner in a legal or accounting firm). Once you have identified a complete list of who is potentially a related party, analysis can then be performed to confirm they meet the criteria in AASB 124 and then identify any transactions with these parties. Remember that transactions should be included whether or not a price was charged or whether the transaction was formally documented or not.
Changes to car thresholds from 1 July The car limit for the 2026 income year is $69,674. This is the highest value that a taxpayer can use to calculate depreciation on a car where they use the car for work or business purposes and they first use or lease the car in the 2026 income year. If a taxpayer is buying a car and the price is more than the car limit, the highest input tax ( GST ) credit they can claim (except in certain circumstances) is one-eleventh of the car limit. For the 2026 income year, the highest input tax credit they can claim is $6,334 (i.e. one-eleventh of $69,674). The luxury car tax ( LCT ) threshold for the 2026 income year is $91,387 for fuel-efficient vehicles, and $80,567 for all other luxury vehicles. Input tax credits need to be claimed within the four-year time limit. A taxpayer cannot claim an input tax credit for luxury car tax when they buy a luxury car, even if they use it for business purposes.
