Charities must publish clear information on their work and finances in the interests of transparency, accountability and in order to build public trust and confidence in both individual charities and the sector as a whole. However, it is important that the regulatory requirements are proportionate.
Following the implementation of the Charities Act 2011, a charity is required to have an audit if it has:
- an annual income from all sources of more than £500,000; or
- assets worth more than £3.26 million and an income of more than £250,000.
Smaller charities will usually have an independent examination.
Independent examinations are not as rigorous as audits and so their scope and effectiveness are more limited but we try to add value despite that.
Companies and LLPs which do not require an audit may also benefit from having an Assurance Report, which, again, is not an audit but can provide more targeted assurance on certain aspects. Assurance reports can be thought of as a halfway-house between purely confirming that a set of accounts agrees with the business’s books and records and the strictures of a full audit.