Tom Fitch, head of London-based company Community Accountancy Self-Help, or Cash, said widespread low-level fraud was happening in small charities because independent examiners did not have time to check receipts.
Fitch said checks were necessary to see whether the right amounts were being entered into their books by charities.
He said independent examiners often did not check closely because they felt under pressure to keep their costs down and to be lenient with small charities that were considered to be doing good work.
"Small organisations are often fairly chaotic and there is often pressure on the examiner to let things go through as a favour," said Fitch.
"People look at whether restricted funds are being used properly, but whether there is fraud going on is missed out. The house is built on sand."
But John O'Brien, chair of the Community Accounting Network and head of Nottingham's Community Accounting Plus, said he did not believe fraud was a major problem for small charities.
"In my experience, despite a lenient accounting regime, I'm always surprised by how little fraud there is," he said.
"But I think a bigger problem is that mistakes are caused by low levels of book-keeping skills.
"I believe the current guidance for independent examiners is about right. You're encouraged to check as much as you think is necessary. That could be more or less than 10 per cent."