2024 King’s Speech: Audit Reform Announced by UK Government Government...
Merging a robust accountancy background with a passion for technical writing, Alex Hartley simplifies complex audit and tax topics.
Latest posts by Alex Hartley (see all)
- Choosing the Right Auditor for Innovate UK Grants - 15/01/2024
- The Importance of Audits for Innovate UK grants - 11/01/2024
- The Audit Requirements For Non-profit Organisations - 10/11/2023
The Independent Audit Requirements for Non-Profit Charity Organisations: Charity Reporting and Accounting
Contents
show
Introduction: The Importance of Audits in the Charity Sector
Welcome to Jack Ross Audit, a brand division of Jack Ross Chartered Accountants that specialises in providing cutting edge audit services. If you are in need of a comprehensive audit or professional financial advice, use the contact form on the right and one of our audit experts will be in touch.
In the charity sector, financial transparency is not just a legal requirement but also a key to maintaining public trust. This article explains the specifics of conducting an independent audit for your non-profit organisation. Understanding the audit process will help ensure that your charity operates in a transparent and ethical manner, which in turn boosts donor confidence.
Understanding Audit Requirements
What is an Independent Audit?
An independent audit is a thorough examination of an organisation’s financial statements by a registered auditor. This process is often a legal requirement, particularly for larger charities. The purpose of an independent audit is to provide an unbiased view of the financial health of the charity, making it a valuable tool for both internal and external stakeholders.
Types of Nonprofit Audits
There are various types of non-profit audits, including financial audits, compliance audits, and program audits. Each type of audit serves a different purpose but primarily aims to verify the financial position of the charity. Financial audits focus on the accuracy of financial statements, compliance audits check adherence to laws and regulations, while program audits evaluate the effectiveness of programs in achieving their objectives.
When is an Audit Required?
In general, charities with a gross income above a certain threshold are required to have an audit. The specific audit requirements for charitable companies may vary based on area and the income of the charity. It is crucial to consult the relevant governing body to understand whether your charity must undergo an independent audit.
Reporting Legal Requirements: What You Need to Know
Charity Reporting and Accounting
Beyond the audit itself, charities must adhere to specific reporting requirements. These requirements apply to all charities and are often subject to a statutory audit. Proper reporting ensures that the charity is not only compliant with the law but also transparent to its donors and other stakeholders.
Financial Statements and Annual Reports
The financial statements of a charity must be prepared in accordance with legal requirements and UK accounting standards. Additionally, charities must produce an annual report, detailing the achievements of the charity over the fiscal year. The annual report often includes a narrative section that discusses the charity’s mission, objectives, and impact, providing a fuller picture of the charity’s activities.
Additional Reporting Requirements
Some charities, depending on their size and structure, may have additional reporting requirements. For instance, Charitable Incorporated Organisations (CIOs) must have an audit and meet identical annual reporting requirements under the 2008 regulations. These additional requirements might also include specific disclosures or supplementary reports that provide further insights into the charity’s operations.
The Jack Ross Team has been an absolute delight. Professional, nice and fast during the Audit procedure. Thank you Jack Ross Team.
Very good service from the Jack Ross Team. They gave us good advice and completed a very efficient audit. They have a friendly and competent team. I would surely recommend them.
Brilliant service from the Jack Ross team in setting up several companies in very quick time, along with providing associated accountancy advice. Can recommend wholeheartedly as a leading accountancy practice with a can-do attitude.
First class service for many years from a first class team. Highly recommended. Prompt, commercially aware, personable.
Been using Jack Ross for a number of years. Good clear advice and nice people to do business with.
Jack Ross is based in Manchester and provides tax planning and Xero accounts. They are a long-standing and well-regarded firm with an excellent reputation. They provide their clients with exceptional service and a wealth of advice. I have no hesitation in using their professional services.
Jack Ross has been my accountants since I set up my business in 2016. From the outset I was helped with advice, support and encouragement. I cannot commend them highly enough. Always on hand to answer any question and responsive to any changes in the economy which might concern their clients. I don’t have to worry about the financial side of my business as all of that is taken care of and dealt with by Umar and the brilliant team. If you are looking for a top class accountancy firm which maintains the personal touch they are for you!
I would recommend this account, knowledgable and helpful
I can confidently recommend Jack Ross Accountants. They are continually improving their service, greatly benefiting our company as well as me personally. The team at Jack Ross have helped suggest and set up innovative accounting software, adding training and support. This alone has been a massive step towards having more control and understanding of our company finances.
We have enjoyed a solid and constructive relationship with JackRoss and Can highly recommend them for accountancy services.
We have been working with Jack Ross for over two years and the service has been fantastic. They have a great and knowledgable team who have taken good care of us and our accounts.
Meeting to review annual accounts and discuss future plans. Very productive as they definitely talk my language - on reflection probably the best such meeting in recent years. Many thanks Umar and Jamie
Jack Ross has serviced my Personal Tax requirements for the last 5 years. During some complicated challenges their advice was excellent and the customer service second to none and left me with no doubt all was in hand.
Following a recommendation, I have used Jack Ross for all my accounting needs (including payroll) since the inception of my business over 12 years ago. The relationship has been completely hassle free and I greatly value their service, which goes well beyond preparation of accounts. Their tax planning advice has been really helpful and I have always felt that they have ‘got my back’. Can’t recommend them enough.
We have finally found the Accountancy firm that we have been looking for! We switched over to Jack Ross towards the end of last year and from the very first contact to the recent submission of our end of year accounts the service provided has been fantastic and has easily exceeded our expectations. Thank you!
Excellent service; very helpful people and work done much quicker than I expected.
I have used Jack Ross as my accountants for a number of years. Their service is professional and accurate. They deal with queries promptly and I can always get hold of the person I need to speak to. Their digital product has made a big difference to the efficiency of my business. I would not hesitate to recommend them.
Jack Ross have been my family and business accountants and financial advisors for over 50 years. The delivery of services is second to none and i would recommend them to anyone. We have also built up great friendships over the years, above and beyond that of a normal business relationship which i value greatly.
We have been looked after by jack Ross for a number of years. They have given us fantastic tax advise and helped our company grow from strength to strength. A & f
Excellent advice and an understandable explanation of a very complex area of tax and corporate law which other (so called) advisors managed to totally confuse me. Thank you.
I have had a relationship with Jack Ross for several years and continue to be impressed by the proactive support and diligent advice received across the breadth of the firm. Excellent at signposting.
Jack Ross have acted for our law company for over 5 years and have been professional, prompt, and knowledgable in all aspects of our dealing with them.
Conducting the Audit: A Step-By-Step Guide
Choose an Auditing Firm
It is crucial to select a reputable non-profit auditing firm to conduct your independent audit. The firm should have expertise in non-profit accounting and understand the specific audit requirements for charitable organisations. Choosing the right auditing firm can make the process smoother and ensure that you meet all legal and regulatory requirements.
Jack Ross Chartered Accountants has decades of experience in dealing with non-profit accounting and can provide independent audit services for charities of any size. Use the contact form on the right and one of our audit experts will be in touch.
The Audit Process
The audit process involves several steps, including planning, fieldwork, and reporting. During this phase, auditors will review information about the charity, including its financial results and its subsidiary undertakings if applicable. Auditors will also likely interview key personnel and examine internal controls to assess the reliability of the financial statements.
Outcomes and Actions
Once the audit is completed, charities must take appropriate steps to address any issues identified. This may require an update to the financial statements or additional actions to comply with reporting requirements. The findings of the audit can also serve as a guide for future activities, helping the charity to improve its financial management and operational efficiency.
Exceptions: When an Audit is Not Required
Certain smaller charities may find that an audit is not required by law. However, even in these cases, an independent examination of charity accounts is often recommended for transparency. An independent examination, while less rigorous than an audit, can still provide valuable insights into the charity’s financial condition and ensure accountability to stakeholders.
Contact Auditing Firm Jack Ross
- Understand the types of non-profit audits and when they are legally required.
- Familiarise yourself with the reporting requirements, including charity reporting and accounting standards.
- Choose a reputable non-profit auditing firm like Jack Ross to conduct an independent audit.
- Be prepared to take action based on the outcomes of the audit.
Conducting an independent audit is not just a legal requirement but also a best practice that adds credibility to your charity. Whether you are a small charity or a larger organisation, understanding the audit requirements is essential for financial transparency and integrity.
Eager to ensure your organisation’s financial integrity with our expert audit services? Complete the contact form below, and a Jack Ross Audit team member will get in touch to discuss your specific auditing requirements.
Merging a robust accountancy background with a passion for technical writing, Alex Hartley simplifies complex audit and tax topics.
Latest posts by Alex Hartley (see all)
- Choosing the Right Auditor for Innovate UK Grants - 15/01/2024
- The Importance of Audits for Innovate UK grants - 11/01/2024
- The Audit Requirements For Non-profit Organisations - 10/11/2023
For most nonprofits, whether or not the charity requires an audit will depend upon both its total annual revenues AND its local rules/laws. For example, many states have their own regulations governing whether or not an audit by a registered auditor is necessary for certain nonprofits. Additionally, larger nonprofits may be legally subject to statutory audit due to their size and/or power.
Generally speaking, charities (and their subsidiary undertakings) which have gross incomes over a certain threshold may be required to undergo either independent examination or an audit under the Companies Act 2006/2008.
In some cases, a ‘parent’ charity including its subsidiary undertakings may be subject to audit under charity law wherever there are significant financial links between them. It is important for any charity to ensure it understands any relevant legal requirements before submitting its accounts.
Client Testimonials
Explore the success stories of audit clients we’ve helped achieve great things.
The Jack Ross Team has been an absolute delight. Professional, nice and fast during the Audit procedure. Thank you Jack Ross Team. Engaging with the Jack Ross Team for our audit was one of the best decisions we've made this fiscal year. I was particularly impressed with their swift and streamlined audit process. Unlike other firms that drag on for weeks, Jack Ross was able to conclude our audit in record time without cutting corners.
Their professionalism is unparalleled; from initial consultation to final report, every interaction was marked by courtesy, respect, and a deep understanding of our unique business needs.
But what surprised me most was their warmth and friendliness; they made a typically stressful process feel almost enjoyable. It's refreshing to work with a team that combines speed and efficiency with such high levels of customer service.
If you're looking for an audit service that respects your time without compromising on quality, then look no further than Jack Ross Audit.
Their professionalism is unparalleled; from initial consultation to final report, every interaction was marked by courtesy, respect, and a deep understanding of our unique business needs.
But what surprised me most was their warmth and friendliness; they made a typically stressful process feel almost enjoyable. It's refreshing to work with a team that combines speed and efficiency with such high levels of customer service.
If you're looking for an audit service that respects your time without compromising on quality, then look no further than Jack Ross Audit.
Sofia Carlini
Financial Controller
Excellent service from the Jack Ross Audit Team. They gave us good advice and completed a very efficient audit. They have a friendly and competent team. I would surely recommend them.
I've always considered auditing a cumbersome process, but my experience with the Jack Ross Audit Team has completely changed my perspective. Their service was impeccable from start to finish. The team not only offered us invaluable advice to streamline our financial systems, but they also executed an extremely efficient audit that was far less intrusive than I've experienced in the past.
What truly sets Jack Ross Audit apart, however, is their team. Each member we interacted with was incredibly competent and genuinely friendly and approachable. They made us feel like a valued client rather than just another case file.
If you're unsure which accounting firm to choose for your audit, I can't recommend Jack Ross Audit highly enough. Their blend of professionalism, efficiency, and genuine care for their clients is rare in the financial world.
I've always considered auditing a cumbersome process, but my experience with the Jack Ross Audit Team has completely changed my perspective. Their service was impeccable from start to finish. The team not only offered us invaluable advice to streamline our financial systems, but they also executed an extremely efficient audit that was far less intrusive than I've experienced in the past.
What truly sets Jack Ross Audit apart, however, is their team. Each member we interacted with was incredibly competent and genuinely friendly and approachable. They made us feel like a valued client rather than just another case file.
If you're unsure which accounting firm to choose for your audit, I can't recommend Jack Ross Audit highly enough. Their blend of professionalism, efficiency, and genuine care for their clients is rare in the financial world.
Katrien Vanassche
Financial Director
Get a Personal Consultation
Office
Jack Ross Chartered Accountants, Barnfield House, The Approach, Manchester, M3 7BX
Open Hours
Monday-Friday 8:30 am - 5 pm
Latest News
Learn about the critical audit requirements for non-profit organisations to...