ICAEW sees room for improvement in charity reporting
Following publication of the Charity Commission’s review that found that less than a quarter of charity auditors complied with new reporting rules, ICAEW is calling on charity auditors to ensure their skills are suitable for the work they undertake.
Commenting on the Commission’s review on reporting matters of material significance by auditors in the charity sector, Gillian McKay, ICAEW Head of Charity and Voluntary sector, said: “Charities play a significant role in the fabric of our national life but can only do so if they have the trust and confidence of the communities they serve. The vast number of charities demonstrate good practice and have a positive impact in the areas they operate.”
The regulator undertook the review to test compliance with rules that came into force from May 2017, extending the list of reportable matters to include modified audit opinions, such as paragraphs about an emphasis of matter or a material uncertainty regarding going concern – meaning there are doubts as to the charity’s ability to remain solvent.
McKay said that financial transparency was an essential component to maintaining trust and audits helped provide such trust. She added: “They also help charities in cutting through some of the complexity often present in annual reports and financial statements. Although auditors have worked hard to deliver the value that better reporting brings, there is still room for improvement. ICAEW works closely with the Commission and we expect our members to maintain high standards in professional practice and to ensure their skills are suitable for the work they undertake.
We hold regular technical updates, webinars and events through the ICAEW Charity and Voluntary Sector Community. These events contain essential updates in the field of charity audit, accounting and taxation and we urge our members to engage with the Community to ensure that they are up to date with the latest regulations.”
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