The Charity Commission is advising charities of changes to audit thresholds which are aimed at reducing the regulatory burden for charities.
The changes came into force on 31 March 2015. The Government changes include increasing the basic audit threshold from £500,000 to £1 million, meaning less charities will be required to have their accounts formally audited.
Those charities can instead have their accounts looked at by an increased pool of Independent Examiners, ensuring that the level of assurance remains high.
Other changes that come into force include:
Increasing the aggregate group income threshold at which parent charities should have group accounts from £500,000 to £1 million;
Increasing the preparation threshold for group accounts from £500,000 to £1 million; and
Adding the Institute of Financial Accountants and the Certified Public Accountants Association to the list of recognised professional accountancy membership bodies whose appropriately qualified members can carry out independent examinations of the accounts of charities with incomes that are more than £250,000.
The changes follow consultation by the Office for Civil Society with charities and the accounting sector. According to the Charity Commission, it is hoped that the changes will make it easier for charities to find a qualified Independent Examiner.
Charities are encouraged to look at the changes and see if they can benefit from these changes, particularly those whose financial year has recently ended.
The commission has updated guidance to reflect these changes. Charity reporting and accounting - the essentials March 2015 (CC15c) is available on gov.uk.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
