Trade Associations
- What is a Trade Association?
- Why is auditing a Trade Association any different from auditing a profit making company?
- What experience does Richardsons have in auditing such organisations?
A Trade Association is an organisation, formed by members of a particular industry to act on their behalf. This usually involves promoting the members’ products and services and providing advice. Such organisations are non-profit making, aiming only to raise revenue sufficient to cover their costs.
Why is auditing a Trade Association any different from auditing a profit making company?
The priorities of a Trade Association are different from profit making companies. The promotion of members’ best interests cannot be measured by the financial success of the association. It is, therefore, important to also consider qualitative aspects of the “business”.
In traditional financial terms one of the main considerations is the type of income received. This varies significantly from that received by profit making companies. For example, an association will typically receive an annual subscription from members. However, in addition, there may be income from support activities not covered in the annual subscription, specialist research projects, organising trade fairs and government grants (some departments require that the use of these funds be audited, so there are often additional reporting requirements). Each of these classes of income needs to be separately identified and specialist audit tests devised.
What experience does Richardsons have in auditing such organisations?
Richardsons audit a number of Trade Associations including BESA, the British Educational Suppliers Association.
Who can I contact for more details?
If you would like to know more about auditing Trade Associations, please feel free to contact Simon Husband. Our telephone number is 01844 261155.
