A separate accounts monitoring review focused on the 97 charities that filed accounts in 2016 with a modified audit opinion, meaning that their accounts could be materially misstated. It found that the majority of those charities fell into one of two categories:
- either there was a lack of evidence to support the figures in the accounts, often relating to stock balances in both the current and previous years, or
- there was non-compliance with the SORP, often relating to property, investments or pension liabilities.
The CCEW noted that if a charity’s auditor issues a modified audit opinion, this could damage donor’s confidence in the trustees’ governance of that charity. They go on to state that:
‘to minimise the risk of a modified audit opinion, trustees need to check that their charity has sound financial systems and accounting records in place, take SORP compliance seriously and work with their auditors to provide the information that they will need for their audit’.
If you are unsure on any of these items please contact us at your earliest convenience.
The trustees’ annual report should explain the circumstances behind a modified audit opinion to provide assurance that the trustees are taking action.
Full details of this accounts monitoring report can be found on the CCEW website.
Updated 25 October 2017
This article features in our Charity Newsletter Autumn 2017. To see the full version please click here.
If you would like to find out more about any of the topics covered in our Charity Newsletter and how we at Robinson Reed Layton can assist, please contact our Charities Partner, Mark Williams, on 01872 276116 or mark.williams@rrlcornwall.co.uk. You can signup to receive our Charity Newsletter here.
This publication has been prepared by Robinson Reed Layton. It is to be treated as a general guide only and is not intended to be a comprehensive statement of the law or represent specific advice. No liability is accepted for the opinions it contains, or for any errors or omissions. All rights reserved.