Charities: audit and independent examination
This consultation looks at recommendations to increase financial thresholds determining whether charity accounts must be audited or examined.
Lord Hodgson reviewed the Charities act 2006 in 2012. One of his recommendations was to increase the financial thresholds above which charities must have their accounts audited rather than independently examined.
Currently, charities that fall into either of the following categories must have their annual accounts audited by a member of the Register of Statutory Auditors:
- an annual income of more than £500,000
- assets worth more than £3.26 million and an annual income of more than £250,000
The government is proposing to increase these thresholds to:
- an annual income of more than £1 million
- assets worth more than £3.26 million and an annual income of more than £500,000
We are also consulting on increasing the threshold above which charities must prepare group accounts from a total income of £500,000 to £1 million.
These proposals would make up to 4,000 charities exempt from the expensive requirement for a full audit but still keep an appropriate amount of scrutiny.
We also want to know whether we could extend the list of professional accountancy membership bodies able to carry out independent examinations for charities with an income of over £250,000.