Do we need an audit?
Following changes to the charity audit thresholds, an individual charity has only been required by law to have an audit carried out where gross income exceeds £1 million, or the gross assets exceed £3.26 million and the charity’s income exceeds £250,000. Whilst this potentially allows a number of charities to dispense with the need for an audit, trustees must consider whether this is in the best interest of the charity.
Where a charity receives a significant amount of grant funding, some or all of the grants may actually require the charity to have an audit. In some cases, trustees will need to speak with the grant providers to confirm whether reference to an audit means an audit in accordance with the Charities Act, or whether an independent examination is sufficient.
It is also the case that many trustees, especially those who are not involved in the day to day operation a charity, rely on the audit to provide them with assurance that the accounts are true and fair, the charity has effective financial controls, and the risk of fraud is being mitigated. Should the charity dispense with the audit, steps may need to be taken to ensure this level of assurance can be maintained.
Please call our charity specialists on 01233 630000 if you would like further help and advice relating to audits or other charity related issues.