Consultation opens on the reporting of matters of material significance by auditors and independent examiners
The Charity Commission for England and Wales (CCEW) and the Office of the Scottish Charity Regulator (OSCR) previously published a single list of matters to be reported to the regulators by Auditors and Independent Examiners which was consistent for England, Wales and Scotland.
The proposed new list of material matters to be reported to the regulators follows the establishment of the Charity Commission for Northern Ireland and takes account of our experience of regulation to date. As such, now is an appropriate time to review the list of matters to be reported.
It is important to have a common list to simplify reporting requirements and ease the burden upon auditors or examiners acting for charities who work in multiple jurisdictions. It also means that guidance to auditors and independent examiners can be consistent across jurisdictions.
The proposed guidance drops one of the existing eight reportable matters and adds three new matters. The resulting ten matters of material significance would be common to all the UK charity regulators. It is hoped that by including these extra matters, auditors and independent examiners will be clearer in the areas they should be reporting.
The new matters are areas where regulators have an interest and where it has been found that reports are not always made or, in the case of a modified audit opinion or qualified independent examination report, it provides early notification of the matter ensuring a more timely intervention.
The consultation document can be accessed here.
Frances McCandless, Chief Executive of the Charity Commission for Northern Ireland said: “With the regulatory landscape for UK charities now complete, the Commission is keen to lend its support to a harmonised framework for reporting by auditors and independent examiners of matters of material significance to the a UK charity regulator. We hope to see auditors and independent examiners across the UK engage with this consultation and contribute to the guidance”.
Laura Anderson, Head of Enforcement at OSCR said: “Since we first published the guidance both public expectations of charities and our regulatory experience in receiving reports have shown that there is a need to make changes. We revisited the guidance with this experience in mind and with the objective of identifying those issues where regulatory action may be needed. With the Charity Commission for Northern Ireland joining us, now is an opportune moment to update the guidance and we welcome your views and comments on it.”
Nigel Davies, Head of Accountancy Services at CCEW, said: “With the recent debate about auditors’ reporting duties in the light of the report by the Public and Constitutional Affairs Committee on the collapse of the charity Keeping Kids Company, this consultation provides an opportunity to explore what extra areas of reporting are necessary to assist in our taking timely regulatory action and to help underpin public trust and confidence. The UK charity regulators share a common objective in seeking a reporting regime that is effective with a minimum of regulatory burden. Your views are needed on whether we have got the right balance”.
The UK charity regulators anticipate issuing the new guidance by the end of 2016.