New ICAS 2019 guidance for CAs acting for Scottish charities
The ICAS Charities Panel has published a revised edition of its Guidance for ICAS members acting for Scottish charities for periods commencing on or after 1 January 2019.
The Guide is designed to remove some of the heavy lifting needed to understand the requirements placed on accounts preparers, auditors and charity independent examiners.
While it is not practical to cover all the requirements which have a bearing on charity accounts and the external scrutiny of those accounts, the Guide covers the key requirements placed on both company and non-company charities, including charitable incorporated organisations (SCIOs).
Recent developments
There have been several developments to reflect in this edition of the Guide, since the previous edition was published in August 2016, including:
- The withdrawal for the Financial Reporting Standard for Smaller Entities (FRSSE) and the associated Charities SORP (FRSSE) for periods commencing on or after 1 January 2016.
- Revised International Standards on Auditing (ISAs) (UK) for reporting periods commencing on or after 17 June 2016 and a revised Practice Note 11: The Audit of Charities in the UK published in November 2017.
- Amendments to FRS 102: The Financial Reporting Standard Applicable in the UK and Republic of Ireland and amendments to the Charities SORP (FRS 102) for periods commencing on or after 1 January 2019.
There are no changes to the requirements placed on charities preparing receipts and payments accounts.
Withdrawal of the FRSSE
Following the withdrawal of the FRSSE and the Charities SORP (FRSSE), charities preparing ‘true and fair’ accounts must comply with both FRS 102 and the Charities SORP (FRS 102).
Smaller charities preparing ‘true and fair’ accounts
As charities must comply with the Charities SORP which is based on full FRS 102, for all intents and purposes, charities cannot apply Section 1A.
Charities with a gross income of £500,000 or less can take advantage of concessions available within the Charities SORP (FRS 102).
Charities are not eligible to apply FRS 105: The FRS applicable to the micro-entities regime and charitable companies are not permitted to prepare Companies Act abridged accounts.
Revised ISAs (UK) and revised Practice Note 11
Practice note 11 was revised to provide charity auditors with assistance in complying with the revised ISAs (UK).
The Practice Note is shorter than the previous edition and this has been achieved by not repeating material from the ISAs (UK) and focusing very much on charity specific considerations.
The ICAS Charities Panel has published Auditor’s report guidance for ICAS firms acting as auditors of Scottish charities, including two illustrative reports. The guidance and illustrative reports apply to reporting periods commencing on or after 17 June 2016.
Amendments to FRS 102
Following the first triennial review of FRS 102 by the FRC, the Charities SORP-making body published an Update Bulletin. Update Bulletin 2 amends the Charities SORP for changes to FRS 102 which apply to periods commencing on or after 1 January 2019.
There are additional clarifying amendments to the Charities SORP which apply to periods commencing on or after 5 October 2018: the date Update Bulletin 2 was published.
Keeping up to date
In addition to checking icas.com on a regular basis for developments, ICAS members using the Guide should regularly monitor the OSCR website and the Charities SORP website to keep up to date with changes to accounts and scrutiny requirements and any new guidance.