Response to proposals on raising the audit threshold for charities in England and Wales
The ICAS Charities Committee welcomes the opportunity to comment on the Cabinet Office proposals on charity audit and independent examination for charities in England and Wales.
Reponse to proposals on raising the audit threshold
- The Cabinet Office has not provided sufficient evidence to support the threshold increases and the impact assessment accompanying the consultation is too simplistic in its consideration of anticipated savings.
- Charities are major providers of public services and therefore plans to increase the audit threshold seem out of step with the proposed reduction in external scrutiny requirements.
- There is no requirement for an independent examiner to identify a charity's internal controls and to test their effectiveness while an auditor must do so.
- Trustees may seek the additional comfort that an audit brings, especially if the charity doesn't employ a qualified accountant or there is a skills gap in relation to finance and accountancy on the trustee board.
- Group structures introduce additional risk to a charity's business model and we believe it is important that group accounts continue to be prepared and audited at the level of the current threshold so that a charity's trustees have clear sight of the group's financial position and performance.