What is a QBCC Licensee Audit?
A QBCC licensee audit is a financial examination required by the Queensland Building and Construction Commission (QBCC) to verify that licensed builders and contractors meet the Minimum Financial Requirements (MFR). This regulatory framework ensures that Queensland building industry licensees maintain adequate financial resources to complete contracted works and meet their obligations to consumers.
The audit must be conducted by a registered company auditor who examines the licensee's financial position against the QBCC's prescribed financial tests, including the Net Tangible Assets (NTA) test and Current Ratio test.
Who Needs a QBCC Audit?
QBCC licensees are generally required to report their financial information annually. The level of reporting depends on your licence category and self-certified revenue:
- Category 1-3 (SC1-SC3): Financial information must be prepared and may require audit/review depending on circumstances
- Category 4-7 (SC4-SC7): Generally require audited or reviewed financial statements
- New licensees: May require audit within specified timeframes after licence grant
- Licence upgrades: Moving to a higher category typically requires audited financials
- QBCC-initiated reviews: The Commission may request audited financials at any time
Minimum Financial Requirements Explained
The QBCC MFR framework includes several financial tests:
- Net Tangible Assets (NTA): Your assets minus liabilities and intangible assets must meet minimum thresholds based on your licence category
- Current Ratio: Current assets divided by current liabilities must be at least 1:1
- Maximum Revenue: Your annual turnover must not exceed the limit for your licence category
- Allowable annual turnover: Determined by your NTA and licence category
QBCC Audit Requirements
When an audit is required, the auditor examines:
- Balance sheet accuracy and completeness
- Asset valuations and ownership verification
- Liability identification and measurement
- Related party transactions and guarantees
- Revenue recognition and reporting accuracy
- Calculation of NTA and Current Ratio
- Compliance with reporting requirements
QBCC Audit Costs
QBCC licensee audit fees typically range from $1,500 to $5,000 depending on business complexity, annual turnover, asset holdings, and the number of related entities requiring consolidation. Larger builders with complex structures and higher category licences will generally pay more due to increased audit work.
Consequences of Non-Compliance
Failing to meet QBCC financial requirements can result in:
- Licence suspension or cancellation
- Category downgrade limiting your maximum project value
- Exclusion from tendering on government projects
- Financial penalties
- Reputational damage in the industry
Get Your QBCC Audit Quotes
Post your QBCC licensee audit job on AuditLink for just $39 inc GST. Receive 3-6 fixed-price quotes from Queensland auditors experienced with QBCC requirements within 24-48 hours.