The main reasons that modified audit opinions were issued included:

• 50 charities where there was a lack of evidence to support figures within the accounts. In a “majority” of these instances the lack of evidence was as a result of deficiencies in the charity’s accounting records. 
• 45 charities who demonstrated material non-compliance with the Charity Statement of Recommended Practice (SORP)
• Two charities who received an adverse opinion as they had prepared accounts on a going concern basis of accounting but their auditor had concluded that the charity was not a going concern.

The Charity Commission review, which elaborates on the specificities within the two larger categories highlighted above, provides some wider lessons for other charities to minimise the risk of a modified audit opinion aimed at trustees.  It comments:

To minimise the risk of a modified audit opinion, trustees need to check that their charity has sound financial systems and accounting records in place, take SORP compliance seriously and work with their auditors to provide the information that they will need for their audit.  Where appropriate, the trustees’ annual report should explain the circumstances behind a modified audit opinion and provide assurance that the trustees are taking action in response to the concerns reported by their auditor.

The review also highlights a number of resources to assist trustees in this respect.

The press release and report are available on the Charity Commission website.