New Forest


Be aware of the reporting duties of an auditor

Trustees should be aware of the reporting duties of an auditor and independent examiners as the transparency agenda continues at the Charity Commission.

New rules came into force from May 2017 for auditors to report any matters of significance promptly to the Commission. The list of reportable matters was extended to include where an auditor intends to give a modified audit opinion and/or an audit opinion that includes paragraphs about an emphasis of matter or material uncertainty regarding going concern.

The new rules are designed to help the regulator intervene in a more timely way, notably where charities face financial difficulty that may put their future at risk. This follows the collapse of Kids Company in 2015 and the subsequent inquiry, which recommended clearer guidance to auditors on the issues regulators expected them to report.

Michaela Johns, an experienced auditor and head of HWB’s not-for-profit team, says: “The commission’s focus on accountability continues and this updated guidance is at the heart of this.

“All auditors take their role extremely seriously and I welcome the work by the Commission to raise awareness across the board of reporting requirements. It is vitally important that charity decision-makers are aware of the list of matters of material significance and the duty placed on the auditor or independent examiner to report on these matters.

“The Commission has clearly stated it wants prompt reporting, specifically within days of signing an audit opinion. Charities should ensure they discuss this report with their auditors.”

If you are unclear on the reporting requirements, or for an informal discussion about auditing services, contact Michaela Johns on 023 8046 1256.

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