ACNC Governance Standards Quiz

This quiz is part of our charity governance online learning content.

It covers the ACNC Governance Standards:

Read each question and choose the answer you think is correct. If you get a question wrong, you can try again. If you answer every question correctly, you can download our ACNC Governance Standards certificate to demonstrate your learning.

ACNC Governance Standards Quiz

Question 1

Which of the following best describes the purpose of the ACNC Governance Standards? To ensure that charities:

Submit evidence to the ACNC

Attend annual meetings

Comply with high-level principles

Maximise fundraising efforts

Tick icon Correct

The ACNC Governance Standards are a set of high-level principles instead of precise rules. How each charity complies with them depends on the charity’s circumstances and work context.

Cross icon Incorrect

This is not the purpose of the Governance Standards. Please try again.

Question 2

What type of charities are exempt from the Governance Standards?

Large corporations

Basic Religious Charities

International organisations

Tick icon Correct

Basic Religious Charities are not required to meet the Governance Standards. A Basic Religious Charity is a religious charity that meets six specific criteria.

Cross icon Incorrect

Charities need to meet the Governance Standards, regardless of charity size. Please try again.

Cross icon Incorrect

Charities that operate outside of Australia need to meet the External Conduct Standards in addition to the Governance Standards. Please try again.

Question 3

What does Governance Standard 1 require charities to demonstrate?

Financial stability

Commitment to diversity

Not-for-profit nature and charitable purposes

Marketing strategies

Tick icon Correct

Registered charities must operate as a not-for-profit and have a charitable purpose. Charities should include a not-for-profit clause and their charitable purposes in their governing document.

Cross icon Incorrect

This is not the purpose of Governance Standard 1. Please try again.

Question 4

What does it mean to be a ‘not-for-profit’?

Operating without paid staff

Generating profits for members

Benefitting the public, rather than specific individuals (for example, the people running the charity, or their friends or relatives)

Tick icon Correct

A not-for-profit is generally an organisation that does not operate for the profit, personal gain or other benefit of particular people (for example, its members, the people who run the organisation, or their friends or relatives).

Cross icon Incorrect

Not-for-profits do not operate for the benefit of specific people, such as members. Please try again.

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Not-for-profit organisations can employ paid staff. Please try again.

Question 5

A charity can demonstrate that they can provide information to the public about their charitable purpose in line with Governance Standard 1 by:

Including the charity’s purpose and a rule requiring them to act as a not-for-profit in their governing document, and uploading the governing document onto the ACNC Charity Register 

Using the charity’s website, social media and/or an annual report to share the information

Providing the information on request by phone, email or in writing

All of the above

Tick icon Correct

Charities can demonstrate their charitable purposes in a number of ways.

Cross icon Incorrect

This is one way that charities can demonstrate compliance with Governance Standard 1, but consider if there are other ways charities can demonstrate this. Please try again.

Question 6

What does Governance Standard 2 require charities to do?

Be accountable to their members

Maximise profits for members

Focus on administrative efficiency

Prioritise fundraising efforts

Tick icon Correct

It is important for charities to be accountable to members to ensure transparency and help members understand how the charity is run. If a charity does not have members, it is not required to meet this standard.

Cross icon Incorrect

This is not the purpose of Governance Standard 2. Please try again.

Question 7

A registered charity with members holds its annual general meeting (AGM). During the AGM, a member raises concerns about the charity’s financial management. What steps should the charity take to address this?

Ignore the concerns since the AGM is not the right forum for such discussions

Provide a brief response during the AGM and follow up with detailed information afterward

Refer the member to the charity’s website for financial reports

Dismiss the concerns as irrelevant

Tick icon Correct

This is one way that they charity can demonstrate accountability to its members.

Cross icon Incorrect

Charities need to take reasonable steps to be accountable to members and provide them with information about the charity’s activities and resources. Please try again.

Question 8

To meet Governance Standard 3, charities need to:

Be familiar with the main areas of regulation for their charity

Have processes to protect their charity’s finances and assets

Have policies and processes that ensure their charity meets its legal obligations

All of the above

Tick icon Correct

To ensure it is meeting Governance Standard 3, a charity should be familiar with the main areas of regulation, and have policies and processes to protect finances and to meet obligations. The purpose of Governance Standard 3 is to protect a charity’s assets, reputation and stakeholders.

Cross icon Incorrect

This is one way that charities can work to meet Governance Standard 3, but consider if there are other ways charities can demonstrate this. Please try again.

Question 9

What type of matters may prompt the ACNC to investigate?

Internal disputes with volunteers

Serious offences affecting public trust and confidence

Minor administrative errors

Breaches out of scope, which can be handled by other regulators

Tick icon Correct

Generally, the ACNC will only act when there is a serious risk to public trust and confidence in the sector, and the concerns relate to a charity’s compliance with requirements of the ACNC Act.

Cross icon Incorrect

The ACNC does not have the power to investigate every concern that is raised. See our guidance about what the ACNC can investigate and cannot investigate. Please try again.

Question 10

Who are considered Responsible People under Governance Standard 4?

Board members and trustees

Donors and volunteers

External consultants

Beneficiaries

Tick icon Correct

Board members and trustees are examples of Responsible People.

Cross icon Incorrect

Responsible People are those who are responsible for managing a charity. This includes board members, committee members, directors and trustees. Please try again.

Question 11

How can a charity confirm if their Responsible People are eligible?

Conduct a search of the ASIC Disqualified Persons Register for each Responsible Person

Require Responsible People to sign a declaration confirming their understanding of disqualification 

Check the ACNC Register of Disqualified Persons 

All of the above

Tick icon Correct

All of these steps are ways a charity can confirm if their Responsible People are eligible.

Cross icon Incorrect

This is one way that charities can work to meet Governance Standard 4, but consider if there are other ways charities can demonstrate this. Please try again.

Question 12

Under Governance Standard 5, Responsible People have a duty to:

Act with reasonable care and diligence

Act honestly and fairly in the best interests of the charity and for its charitable purposes

Not misuse their position or information they gain as a Responsible Person

Disclose conflicts of interest

Ensure that the financial affairs of the charity are managed responsibly

Not allow the charity to operate while it is insolvent

All of the above

Tick icon Correct

Charities must take reasonable steps to ensure their Responsible People understand their duties. Charities can outline these duties in a letter of appointment, or during induction or training.

Cross icon Incorrect

This is one duty that Responsible People have under Governance Standard 5, but consider if there are other duties. Please try again.

Question 13

Which scenario demonstrates reasonable financial governance?

All Responsible People have a level of financial understanding that will enable them to make informed decisions about their charity’s finances

The charity’s Responsible People make no attempt to understand the basics of the organisation’s finances, and leave them to someone else to make financial decisions

Responsible People are unaware of or do not understand arrangements the charity has with third party agencies (such as fundraising organisations)

The charity’s Responsible People fail to identify or respond to major risks (such as fraud)

Tick icon Correct

Responsible People should have good processes to prevent financial problems and to make responsible decisions about money. This includes understanding the charity’s finances.

Cross icon Incorrect

Responsible People have a duty to ensure that the financial affairs of the charity are managed responsibly. Please try again.

Question 14

A charity’s Responsible Person also owns an accounting firm that the charity is thinking about engaging to manage its accounts. Which of the following actions demonstrates compliance with the duty to disclose and manage conflicts of interest?

The Responsible Person records their accounting firm in the charity’s register of interests, and leaves the room during discussions and decisions about awarding a contract to their company

The Responsible Person does not disclose that they run the accounting firm that the charity is considering

The Responsible Person participates in discussions and votes on awarding a contract to their company

The charity signs a contract with the accounting firm without checking if any Responsible People have a conflict of interest with that company

Tick icon Correct

This is an appropriate way to manage a conflict of interest. The conflict has been recorded, and the conflicted person has not been involved in the decision-making process.

Cross icon Incorrect

This is not an appropriate way to manage a conflict of interest. Please try again.

Question 15

What is the focus of Governance Standard 6?

Ensuring charities maximise profits

Addressing child labour issues

Encouraging charities to expand their services

Accountability for past conduct related to institutional child sexual abuse 

Tick icon Correct

Governance Standard 6 requires charities to take reasonable steps to become a participating non-government institution of the National Redress Scheme if they are, or are likely to be, identified as being involved in the abuse of a person.

Cross icon Incorrect

The purpose of Governance Standard 6 is to maintain and enhance public trust and confidence in the Australian charity sector by ensuring that a registered charity’s governance enables it to be accountable for its past conduct relating to institutional child sexual abuse. Please try again.

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