Government response to consultation on charities’ audit and independent examination
20 Feb, 2015
The Cabinet Office has published the government’s response to feedback received on its earlier consultation, published in December 2014, on proposals to increase the audit exemption thresholds for charities, increase the threshold at which group accounts must be prepared and broaden the class of bodies whose members can carry out independent examinations of audit exempt charities.
As a result of the feedback received to the December consultation (link to Cabinet Office website), the government will:
- raise the income threshold for charities below which an audit is not required from £500,000 to £1m. Newly exempt charities will require an independent examination by a qualified independent examiner. The threshold for the preparation of group accounts will be similarly increased.
- Not alter the asset threshold for audit exemption for now. An audit will be required if a charity’s income exceeds £250,000 and its gross assets exceed £3.26m. The government was unable to increase the income part of this test without primary legislation, and will consider increasing the asset part of the test once the outcome of the BIS consultation on audit reform is known.
- Add the Institute of Financial Accountants to the list of bodies whose members can carry out independent examinations; the Certified Public Accountants Association may also be added subject to receipt of additional information by the Cabinet Office.
The Government intends to lay a statutory instrument before Parliament with a view to the changes taking effect for financial years ending on or after 31 March 2015.
A copy of the Government’s response is available on the Cabinet Office website.
