Policy paper

A benchmark for the external scrutiny of charity accounts

Setting a minimum standard for the examination of charity accounts.

Documents

Annex: basis for the benchmark for an external scrutiny (audit or independent examination)

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A benchmark for the external scrutiny of charity accounts PDF

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Details

To inform public choice we publish the reports and accounts of every registered charity’s annual income is over £25,000. The trustees of charities with income of more than £25,000 must arrange for an independent person or accountancy firm to carry out either an audit or an independent examination of their charity’s accounts.

The purpose of this is to give the trustees, and those who support or fund the charity, and the public some independent assurance that the accounts are a fair presentation of the trustees’ stewardship of charitable resources.

We have developed this external scrutiny benchmark to help achieve our aim of ensuring that all audits and independent examinations meet a minimum standard, thereby assuring the public that they can read the accounts with confidence. The benchmark gives trustees and the reader or user of charity accounts a way of checking that the basics will have been covered.

In holding charities to account we will use the benchmark as part of our regulatory work to identify any shortcomings to trustees and advise trustees as to what action must be taken. This action may include appointing a new independent examiner or auditor, arranging another external scrutiny and the resubmission of the accounts. Also where an auditor or examiner is qualified we may notify their professional body of the shortcomings that we have identified in that individual’s work.

Initially we plan to work in partnership with professional bodies to raise awareness of their members of the charity reporting, accounting and external scrutiny framework so that their members are equipped to fully meet the requirements and to help professional bodies understand the training needs of the person concerned and the incidence of a lack of competence across their membership so that they can take action to help their members perform well and drive up standards.

We retain the discretion to use non-compliance with the benchmark alone or in combination with other matters as the basis to raise a formal complaint with that person’s professional body.

Published 28 August 2019