Charity Audits – what are they?
A charity audit is when charities have their accounts audited or independently examined according to the appropriate legislation and guidance. An audit is an official inspection of an organisations accounts –in this case for a charity.
Why Should You Use a Charity Audit?
Firstly, charities (whether they are registered with the commission or not) are legally required to prepare accounts, annual reports and annual returns which should be available for inspection when requested. Furthermore, a trustees’ annual report must be prepared, and again, this should be available when requested. Generally, these are all prepared as part of an audit. Charitable incorporated organisations are also required to file accounts and the annual report.
Types of Accounts
Receipts and Payments – This is generally the approach undertaken when the charity has an income below £250,000 during the year. This involves summarising all money coming in and out of the charity in the financial year, it should also include the details of all assets owned by the charity as well as their liabilities. This approach can only be used by non-company charities, as charitable companies, by law, are not allowed to adopt this method.
Accruals – Non-company charities with a gross income above £250,000 must prepare their accounts on the accrual basis in accordance with the relevant Statement of Recommended Practice. The accrual includes a balance sheet, statement of financial activities and explanatory notes.
Talk to the Kelvin Partnership about your charity audit requirements
Here at The Kelvin Partnership we are able to prepare and provide the right audit services for your accounts, ensuring you have all the relevant accounts prepared and available. This is crucial as they may be required for inspection. We are also able to ensure that your accounts are prepared to a high standard and in accordance to the relevant legislation.
Contact us today for a no-obligation consultation.