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| The law |
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Refer to an accountant |
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1. Sections 41- 45 of the 1993 Act |
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The provisions of ss.41-45 of the 1993 Act concerning: |
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- the keeping of accounting records;
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- the preparation of annual statements of accounts;
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- the annual audit or examination of accounts; and
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- the preparation of an annual report,
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do not apply to exempt charities. |
 
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2. Section 46(1) |
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However, under s.46(1), exempt charities do have to keep proper books of accounts. They must also, of course, comply with any express provisions of their governing document regarding accounts or auditing. |
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In many instances, exempt charities will be subject to some other statutory accounting provisions (for example, the Industrial and Provident Societies Acts, an Order made under the Housing Associations Regulations, or the Companies Acts). If not, they must: |
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- prepare consecutive income and expenditure accounts relating to periods of not more than fifteen months; and
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- provide a balance sheet showing the position at the end of each accounting period.
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They must keep accounts books and statements for at least six years unless the charity ceases to exist and we agree in writing that they need not be kept. |
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3. Section 47(2) |
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Under s.47(2) all charities, including exempt charities, must provide a copy of their most recent accounts to anyone who requests them. |
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They may make a reasonable charge for doing this and (provided any charge is paid) must supply the accounts within two months of the request being made. If any doubt exists as to what constitutes the exempt charity’s "most recent accounts", appropriate professional advice should be sought. |
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4. SORP |
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Unless a more specialised SORP applies (such as for Higher Education Institutions or Registered Social Landlords, for example), we should advise exempt charities to comply with the Charities SORP, although there is no legal obligation to do this. |
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The following words and phrases are defined in the Glossary of Terms: |
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the 1993 Act
SORP |
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