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Independent Examination

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All charities are required by charity legislation to have their accounts externally scrutinised. In Scotland this requirement is part of the Charities and Trustee Investment (Scotland) Act 2005 and is regulated by the Office of the Scottish Charity Register (OSCR). The level of external scrutiny will depend on your charity’s structure, income, type of Accounts and constitution.

Which Charity Accounts require an Independent Examination?  

Your charity will need to have your Annual Accounts externally scrutinised by an Independent Examiner, if it prepares Receipts and Payments accounts and is:-

  • unincorporated
  • has a gross annual income not exceeding £250,000  (or not exceeding £100,000 for periods starting on or before 1 April 2011)
  • your constitution does not specify a requirement for an audit of your accounts

Your charity will need to have your Annual Accounts externally scrutinised by an Independent Examiner with specific qualifications, if it prepares fully accrued accounts and is:-

  • Incorporated
  • has gross assets less than £3.6 million
  • has a gross income between £100,000-£499,000

Role of the Independent Examiner  

An independent examiner will review the accounts prepared by your charity, comparing the figures for the current year with those from the previous year. They will consider whether there is anything unusual or undisclosed in the figures and confirm (where possible) that there is no evidence to say that financial records were not kept or that accounts were incorrectly prepared.

The independent examiner has a legal duty to report to OSCR any matter regarding the charity of material significance as well as any other matters (not necessarily of material significance) relevant to OSCR carrying out its regulatory functions.

Information regarding the rights and duties of independent examiners is available on the OSCR website.

Choosing an Independent Examiner for Receipts and Payments Accounts 

The Independent Examiner should be a competent person who the Charity Trustees believe to have the legally required ability/qualification and practical experience to examine the accounts. The person chosen by the charity will be required to understand the accounts, and to be able to say that there are no causes for concern.

The Charity Trustees should ensure that the Independent Examiner is:-

  • independent of the management and administration of the charity
  • eligible under the terms of the Regulations
  • eligible to act as an independent examiner under their professional body’s rules and regulations 
  • Someone who has some experience of accounts

OSCR has set out the following suggestions for suitable persons for an Independent Examiner of Receipts and Payments Accounts:-

  • full or associate members of the Association of Charity Independent Examiners
  • qualified accountants currently in employment
  • retired accountants
  • bank managers
  • other people familiar with financial matters

Choosing an Independent Examiner for fully Accrued Accounts

If your charity prepares fully accrued accounts and is required to appoint a suitably qualified Independent Examiner that person must be someone who is:-

  • a member of a professional accounting body or
  • a full member of the Association of Charity Independent Examiners (ACEI) or
  • the Auditor General for Scotland  or
  • a person appointed by the Accounts Commission for Scotland

Contact the Community Toolkit Editor

Conditions of Use
Last Updated 25/10/2011 12:46

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Contact the Community Toolkit Editor

Conditions of Use
Last Updated 25/10/2011 12:46

_uacct = “UA-829849-2″;urchinTracker();

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