Charity Commission consults on revised guidance on the external scrutiny of charity accounts

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03 Jun, 2016

The Charity Commission ("CC") has issued a consultation on changes to its guidance on the external scrutiny of charity accounts. In particular, it proposes extending the scope of independent examination to consolidated accounts. Comments are requested by 30 September 2016.

The CC is consulting on these changes for several reasons. These include the recent changes in thresholds for audit and the preparation of consolidated group accounts; the results of the consultation on matters of material significance that must be reported to regulators; and changing expectations of the charity sector following the 2015 collapse of Kid's Company.

The proposals include:

  • three new Directions about:
       - examiner independence;
       - conflicts of interest and disclosure of related party transactions; and
       - financial sustainability and going concern;
  • new simpler guidance for each Direction;
  • extending independent examination to consolidated (group) accounts;
  • a new simpler format for the examiner’s report;
  • changes to the reporting of matters of material significance (in a separate consultation);
  • new guidance on the reporting of ‘relevant matters’; and
  • a plain English approach which makes it clearer that the guidance is expected practice not simply recommended practice.

The proposed changes are intended to come into force for periods ending on or after 31 March 2017. Comments are requested by 30 September 2016.

The full consultation and press release can be obtained from the Charity Commission website.

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