Charity Independent Examination

James Salim FCCA

Director - Sheffield

jsalim@smh.group

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Transparency and accuracy of charity financial statements is critical for maintaining public trust in the charity sector. As a result, even when a charity does not require a statutory audit, it may still be required to have an Independent Examination.

At SMH Group, our Charity Independent Examinations provide an independent review of financial activities, offering assurance to trustees, donors, regulators and all other users of the financial statements.

Do you need a Charity Independent Examination?

A charity registered in England and Wales are required to have an Independent Examination on their financial statements when the charity’s total annual income is:

• More than £25,000, but not more than £1 million, provided that
• More than £250,000, its gross assets (fixed assets plus current asses) are £3.26 million or less

Some funders or your governing document may also require an independent examination, even if you fall below the income threshold.

Benefits of an Independent Examination

An Independent Examination is an opportunity to help your charity:

• Ensure its financial statements are in accordance with the Charities SORP
• Highlight areas of governance that require improvement and greater focus from management and trustees
• Provide assurance to trustees, funders and the public
• Demonstrate accountability to the Charity Commission

Our charity independent examination process

The requirements for an Independent Examination are less than those of an audit. It is a form of negative assurance, meaning our opinion states that nothing has come to our attention, as opposed to the positive assurance of an audit opinion which states that the financial statements are true and fair. We process includes :

1. Tailored planning – We meet with you to understand your charity’s activities in for year and form an expectation of the results.
2. Review of results and accounting records – We review the financial results, agree key balances to supporting documentation, review income recognition policies are appropriate and confirm the going concern status.
3. Feedback on compliant with the Charities SORP – We review your financial statements and work with you to resolved any instances of non-compliance with he Charities SORP, highlighted areas of best practice.
4. Reporting – We conclude on our procedures, producing an Independent Examiner’s Report on your financial statements.

Get in touch

To find out whether your charity qualifies for an independent examination, or to discuss your compliance needs, contact the SMH Audit & Assurance team on info@smh.group or 01142 664 432.