Accounting and Auditing & Assurance standards ensure transparent and consistent external financial reporting and ultimately build greater trust and confidence with your stakeholders – whether they be your shareholders, investors, donors, funders, members, customers, or tax or rate payers.
Many New Zealand organisations, whether business, not-for-profit or government, therefore have external financial reporting obligations, and these are usually prescribed by law.
Here are some of the laws that require external reporting:
- Charities Act 2005
- Companies Act 1993
- Financial Markets Conduct Act 2013
- Public Finance Act 1989
- Crown Entities Act 2004
- Local Government Act 2002.
Essentially, the law states which types of entities must prepare financial statements that apply XRB standards, publish financial statements and obtain assurance on them.
The XRB standards themselves then state what and how entities must report.
Under certain laws, some entities may opt to follow XRB accounting standards, if they choose to. Also, even if your entity is not required by any law to follow our accounting standards, you can still choose to apply them voluntarily.
For its external financial reporting, your entity will have to apply a particular tier of accounting standards, depending on which sector it operates in.
Your entity will also be required to have an independent audit or review of its financial results.
All these requirements are incorporated into a financial reporting strategy for New Zealand developed by the External Reporting Board.