The three UK charity regulators have issued new joint guidance setting out what auditors and independent examiners must report, including a revised list of matters of material significance
The list has been agreed by the Office of the Scottish Charity Regulator (OSCR), the Charity Commission for England and Wales (CCEW) and the Charity Commission for Northern Ireland (CCNI).
It replaces a previous list of matters which had been prepared jointly by OSCR and CCEW, and has been updated to reflect regulatory experience to date and the fact that the regulator in Northern Ireland is now also in operation.
The new matters of material significance list is intended to assist auditors and independent examiners in meeting their reporting requirements to the charity regulators, and is effective for all audits or independent examinations which are conducted and/or reported after 1 May 2017 (regardless of the accounting period being examined).
It now contains nine matters of material significance, including two new matters that need to be reported. The first of these is if an auditor has concerns regarding a charity’s accounts and issues a modified audit opinion report or qualified independent examiner’s report.
The second is where an auditor has concerns that conflicts of interests or related party transactions have not been properly managed or declared.
In addition, matter eight from the previous list of matters to be reported has been removed. This is due to the fact that this led to auditors and independent examiners advising the regulator where they had simply ceased to hold office. Where ceasing to hold office occurs due to a reportable matter this is covered by an alternative matter.
Nigel Davies, head of accountancy services at the Charity Commission of England and Wales, said: ‘We have, as regulators, reflected on our experiences to date and it is clear that not all auditors and examiners have been reporting matters to us.
‘We hope that by providing an updated list auditors and examiners may be clearer in their duties. We urge auditors and examiners to read this updated list of matters which has been informed by our regulatory work to report and continue to report these serious issues to the regulators.’
Guidance for auditors and independent examiners of charities is here.
