Companies and other organisations have an obligation to be audited under various circumstances. An audit of financial reports is a regulatory requirement for the following:
Large proprietary companies
Registered Schemes (Managed Investment Scheme)
Disclosing entity (A body that holds enhanced disclosure securities)
Medium-Sized Charities with annual revenue of more than $250,000
Large Charities with more than $1 million of annual revenue
Another factor that causes the need for an audit is if a company or charity receives a government grant. This is proof for the government that the figures for the financial reports are true and fair.