Does my charity require and audit or independent examination?
To decide if your charity needs some form of external scrutiny, you will need to refer to:
- Statutory framework and audit thresholds for charities
- The charity’s governing document
You must follow whichever of these sources of guidance stipulates the highest standard of scrutiny.
Statutory framework
Charities with a gross income of £1m or less can decide to have an independent examination instead of an audit as long as:
- their gross assets do not exceed £3.26 million and
- their gross income does not exceed £250,000.
Charities with gross income of £25,000 or less are not generally required to have any form of external scrutiny.
The governing document
Trustees will need to interpret the precise wording of the charities governing document to clarify what sort of external scrutiny is required. The Charity Commission recommends that trustees keep a record of how they interpret the charity’s governing document, and, if in doubt, consult the Commission for advice.
Your charity’s governing document may stipulate who should carry out the review. This is a minimum requirement that the trustees have to meet, and it could mean that your charity has to have a more stringent review that it is obliged to have under the statutory guidance.
Do you still have questions? Get in touch with our charities team to find out more about how they can help you.