Simple Solutions to your Finance and Taxes
Does Your Charity Qualify for an Independent Examination?
What is an Independent Examination of a Charity?
A Registered Charity’s accounts must be checked once a year, usually before the submission to the Charity Commission.
This check can be just for the accuracy of entries without going into the transaction details, or it can be more specific, covering verification and validation of the financial entries.
The first of the above, the check of the accounts with the accounting records, is called an Independent Examination. It can be carried out by a qualified person or anyone with a flair for figures.
The more detailed verification of accounts, called Audit, assumes that accounts are only correct once thoroughly checked by a qualified Accountant. It is hence normally more time and effort-consuming.
Whilst not all Charities may be required to have an Audit, they still have to fulfil the qualifying condition to have an Independent Examination instead.
Below are the criteria under which UK Charities may opt for an Independent Examination.
• Income up to £1 million
• Income £250,000 plus gross assets up to £3.26M.
With a Charity gross income over £250,000 – Charity’s accounts can only be examined by a member of a professionally approved body.
When Charity’s gross income is between £25,000 and 250,000, trained or skilled person can examine Charity’s accounts.
There is no statutory requirement for Independent Examination when Charity’s gross income falls below £25,000.
Which bracket does your Charity fall to?