Financial Management
If you are running a voluntary organisation, it is good practice that you have your accounts verified by someone who is independent of the organisation.
If your organisation has charitable status, that is, it is registered with the Office of the Scottish Charity Regulator (OSCR) then your charity's accounts must be externally scrutinised.
What is the right form of external scrutiny?
The type of external scrutiny you choose depends on
- your charity's governing document
- gross income and net assets
- whether or not your charity is a company
There are two recognised forms of external scrutiny:
Independent examination
An independent examination looks at a charity's accounting records and annual accounts and considers whether the accounts are a fair reflection of the underlying records.
It provides a degree of comfort to the reader that the figures in the financial statements and within the Trustees' Annual Report present an accurate picture of the financial activity of the charity for the accounting period.
Audit
Under the accounting regulations, if the term 'audit' is used in your charity's constitution or governing document, you must have your accounts audited by either:
- a registered auditor
- the Auditor General for Scotland
- an auditor appointed by the Accounts Commission for Scotland (responsible principally for public bodies).
Audits are more commonly required for larger charities, although smaller charities may also have to have an audit if this is stated the in governing document or through a decision made by the charity trustees.
Guidance
It is in the best interest of charity trustees that they read OSCR’s Independent Examination guidance which provides information on the forms of external scrutiny applicable to charities and what an Independent Examination involves and how to choose an independent examiner.
>You can access the guidance here
SVE can assist you with understanding what type of Accounts your charity should be preparing and what type of scrutiny your organisation may require.
Charity Accounts
For guidance on the types of accounts your charity should be preparing depends on several factors which you can find out more about in the A Guide to Charity Accounts
For further support please email Lee Stevenson
To find an independent examiner please go to Association of Charity Independent Examiners (ACIE)
