Independent Examination

Non company charities below the audit threshold can normally have their accounts examined by an independent examiner rather than an auditor. The Charity Commission has produced guidance for independent examiners and pro forma independent examiners reports. These are available from the following links:

CC 63a - Independent Examination of Charity Accounts
This provides a commentary on the Charity Commission’s directions to independent examiners and gives details of how to calculate a charity’s gross income and total expenditure.

Pro forma Independent Examiner’s report
This is one of the forms in packs CC16 and CC17

Further advice on independent examination may be obtained from the Association of Charity Independent Examiners at www.acie.org.uk

Reporting Accountants – Audit Exemption Reports

Certain smaller charitable companies are exempt from the requirements for an audit under the provision of the Companies Act 1985.

For a charitable company to qualify for total audit exemption it must qualify as small, its gross income must not be more than £90,000 and its balance sheet total must not be more than £2.8 million (£1.4 million for financial years ended on or before 30 March 2004).

Charitable companies which qualify as small and have a gross income between £90,000 and £250,000 and a balance sheet total of no more than £1.4 million qualify for partial exemption and must attach to their accounts an audit exemption report prepared by a reporting accountant. The standard governing the work of the reporting accountant is contained in Practice Note 11 – Audit of Charities in the United Kingdom.

Practice Note 11 – Audit of Charities in the United Kingdom
This Auditing Practices Board publication provides guidance on the application of auditing standards to charities and includes the APB Statement of Standards for Reporting Accountants Applicable to Small Charitable Companies.