Charitable companies should prepare for new auditing rules

An accountancy charity is warning that many charitable companies are still not aware of changes to auditing regulations that may affect them from this autumn.

Under provisions of the 2006 Charities Act, the external scrutiny of the accounts of charitable companies with annual incomes of between £10,000 and £90,000 is due to be transferred from company to charity law. The change is expected to happen in the autumn, but a date has not yet been set.

The Association of Charity Independent Examiners, a registered charity that trains independent examiners of charity accounts, is concerned that many charities are not preparing for the change.

“Given a number of enquiries we have received recently, there seems to be some confusion about what is due to happen,” said the charity’s director Fiona Gordon.

The change will mean that charitable companies and non-company charities with annual incomes of between £10,000 and £500,000 will have to have their accounts signed off by an independent examiner as a minimum requirement. Independent examination is an alternative to a full audit.

Under current company law, charitable companies with incomes below £90,000 are not required to have their accounts independently scrutinised.

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