Is your strata community following the law and administrative best practice?
An annual financial statement audit is a legal requirement for Body Corporate and Owners Corporation communities, but even more importantly, an independent third-party audit provides peace of mind for all lot owners and committee members.
In New South Wales and Victoria, an annual financial statement audit is mandatory for schemes with 100 lots or more.
In Queensland, annual audits are required for all Body Corporate communities (with the exception of two lot schemes) and it takes a special resolution to pass at an AGM to resolve not to have an audit.
Body Corporate/Owners Corporation committee members have similar responsibilities as being a member of the board of directors of a company. Directors have fiduciary responsibilities and so do committee members.
An annual audit can protect committee members from possible liability. Section 101A of the BCCM Act states that “…a committee member is not civilly liable for an act done or omission made in good faith.”
Adding a recommendation for a financial statement audit is one of the ways committee members demonstrate ‘good faith’.
To learn more about who can provide an independent audit, see the SSKB’s Info Sheet – Audits & Auditors.