September 4, 2017
The Charity Commission has published updated guidance for independent examiners of charity accounts: it includes three new Directions that must be followed by examiners. The revised Directions aim to strike a fair balance between extending the role of the examiner and, potentially, increasing the regulatory burden on charities. They consider both the implications for the role of the examiner and the need to maintain public trust and confidence in charities.
The three new Directions are as follows:
- to check for any conflicts of interest that may prevent the examiner from carrying out the independent examination;
- to check that related party transactions in Statement of Recommended Practice (SORP) accounts are properly disclosed; and
- to check whether the trustees have considered the charity’s financial circumstances when preparing the accounts, and – for SORP accounts – whether the trustees have made an assessment of the charity’s position as a going concern.
The new requirements are mandatory for independent examiner reports signed and dated on or after 1 December 2017. This is to allow time for examiners to familiarise themselves with the updated guidance.
The Commission has also published a summary of the responses to its consultation on updating the framework for independent examiners that took place in 2016.