The review follows a similar review that was conducted on charity accounts in 2016 where 97 charities received a modified audit opinion.

The main reasons that modified audit opinions were issued in the 2017 review included:

• 48 (2016:50) charities where there was a lack of evidence to support figures within the accounts.
• 31 (2016:45) charities who demonstrated material non-compliance with the Charity Statement of Recommended Practice (SORP)
• One (2016: two) charity received an adverse opinion as it had prepared accounts on a going concern basis of accounting but their auditor had concluded that the charity was not a going concern.

It was noted that most of the charities that submitted accounts with a modified audit opinion in 2016 had addressed their auditor’s concerns in their following year’s accounts.

The Charity Commission review 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.

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.