Finance News: Watchdog scolds slack auditors

The Charity Commission has accused some auditing firms of delaying the submission of charity accounts and of a lack of professionalism.

In a letter to the UK's top 200 firms that regularly audit charities, chief charity commissioner John Stoker wrote that "delay from accountants, independent examiners and auditors" is sometimes the reason accounts are not submitted on time. He says charities also blame a shortage of experienced, professional accountants.

"Some practitioners contribute to the problem, others to the solution," Stoker told the firms. "Those who are confident in their skills professionalism and specialist knowledge can set a clear example to others."

The commission's exhortation to improve accountancy standards is part of its ongoing campaign to ensure charities comply with the SORP and improve reporting.

Its stance was backed by Murtaza Jessa, founding partner of charity specialist accountants Trustient.

He told Third Sector that auditors should be fined if their charity's accounts were submitted late.

"The Charity Commission are quite right," he said. "Some of my new clients says their previous auditors were stalling for work, taking time and delaying. They don't give charities a priority."

"Companies House fines auditors if companies accounts are late. The Charity Commission doesn't. So firms leave trusts to the end. They might get a nasty letter but no fine."

Jessa also attacked the quality of some audits carried out for charities.

"I have seen some terrible sets of accounts with some charities we have just taken over. The accuracy just wasn't there."

Jon Thorne, the commission's head of financial regulation, said the regulator wanted to encourage the "less good" auditing firms to reach the standards of the best. "But if you can't do that maybe you're best not doing it at all.

"We want a small number of excellent practitioners rather than a large number not up to the job," he added.

He said an example of unacceptable auditing practice concerned international charities.

"Some auditors think that when money is passed to a partner agency in another country, their work is done.

"However, we argue that they need to take reasonable steps to ensure that all funds find their way into the hands of beneficiaries. Not all auditing firms take the time and effort to do this."

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