Ask ICAS webinar 3: Coronavirus - Charities and regulation
Some key takeaways from the third Ask ICAS webinar which looked at how the charity sector has been impacted by the COVID-19 pandemic
This webinar, and the accompanying slides, are now available to view on-demand.
The impact for charities
Scott Jeffery CA, Partner, Johnston Carmichael and Member of ICAS Charities Panel covered the challenges and opportunities facing the Charity sector.
Key points on funding, cashflow models and going concern:
- Trustees should ensure they have a clear picture of cash-flow requirements – daily monitoring of cash and updating projections is not too often in the current climate.
- Essential to also identify ways to maximise cash inflow – ensure all grant claims have been submitted, closely monitor debtor balances and proactively seek payment. Consider eligibility for Government grant and loan support available.
Key points on audit and independent examination:
- External scrutiny remains a requirement for all Scottish charities.
- Assessing the appropriateness of applying the going concern basis will be an essential part of all discussions with auditors and independent examiners.
- Trustees should fully document their assessment of the going concern position of the charity.
- Revising cashflow projections to provide a realistic assessment of the impact of Covid-19 and the lock-down on cash and the charity’s ability to meet liabilities as they fall due.
- Speak to suppliers / landlords / bank / HMRC re deferred payments.
- Ensure assumptions are fully documented – auditors and independent examiners will want to review these.
- Regularly revisit and update the forecasts for actual information and based on latest developments.
- Keep in dialogue with your bank/funders/regulator as appropriate.
- Duties on Auditors and IE’s to ensure adequate professional scepticism – challenging responses on assumptions applied to models and estimates, including cash flow forecasts.
- Continue to report matters of material significance, however OSCR has produced a segment on reporting in times of national emergency.
List of technical guidance:
- FRC (Guidance for companies on Corporate Governance and Reporting)
- FRC Bulletin: Guidance for auditors and matters to consider where engagements are affected by Coronavirus (Covid-19) (updated 9th April 2020)
- ICAS - Updated stocktake guidance
- Temporary suspension of “Wrongful Trading” provisions for Directors to reduce threat of personal liability (suspension from 1st March 2020 for 3 months)
Regulation matters
Kenneth Oliver CA, Director, Regulatory Monitoring provided an update on regulatory responsibilities
Key points on ICAS regulation
- Regulations and Standards continue to apply and there is an expectation that firms, members and IPs will endeavour to maintain compliance, and exhaust all reasonable measures to do so.
- A proportionate approach will be taken, and mitigating circumstances may be taken into account during subsequent monitoring procedures where issues or concerns are identified.
- In the short term the material from the mandatory audit course, 'Keeping Audit on the Right Track', will be delivered in a digital format and will be available on the ICAS website soon.
- Client confidentiality, data protection and AML requirements must still be at the front of member’s minds.
- There has been an increase in the number of SARs during the COVID-19 pandemic.
- Whilst individual activity may not be suspicious, reporters are citing these in combination with other ML flags, including large cash deposits; sending funds abroad; multiple faster payments; etc.
Details of how to register for next week’s Ask ICAS webinar will be available soon.