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HMRC internal manual

Enquiry Manual

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HM Revenue & Customs
Updated
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Examining Accounts: Accountants and Auditors: Audit - Conditional Exemption (Charities)

Companies which are charities and meet the general conditions and whose turnover is greater than £90,000 but not greater than £250,000 also qualify for exemption from audit provided that a `reporting accountant’s report’ is provided in its place.

Content of report

The reporting accountant’s report should state the name of the reporting accountant and be signed by him or her.

It should state whether, in the accountant’s opinion

  • the accounts are in agreement with the company’s accounting records
  • having regard only to, and on the basis of, the information contained in those accounting records, the accounts have been drawn up consistent with Companies Act requirements
  • the company is entitled to the exemption.

The fact that accounts are in agreement with accounting records and have been drawn up consistent with Companies Act requirements does not mean that they are necessarily `correct’.

Reporting accountant

The reporting accountant must be a person who is entitled to engage in public practice, who would otherwise be eligible for appointment as auditor of the company (and who must therefore be independent of the company) and who is also a member of one of the following bodies

  • The Institute of Chartered Accountants in England and Wales
  • The Institute of Chartered Accountants of Scotland
  • The Institute of Chartered Accountants in Ireland
  • The Chartered Association of Certified Accountants
  • The Association of Authorised Public Accountants.