The Charity Commission for England and Wales has published results of its Accounts Monitoring Review on Reporting of Matters of Material Significance by Auditors. The review focuses on 114 sets of charity accounts submitted in the six months to 31 October 2017 with audit reports containing information required to be reported to the Commission by the auditor. A report was made to the Commission in only 28 of the 114 instances it was required. In those 28 instances, only a small proportion of the reports were made on a timely basis.
Revised joint guidance for auditors and independent examiners was issued by the UK charity regulators that became effective on 1 May 2017. This revised guidance included an updated list of matters always considered reportable as matters of material significance and requires a report to be made to the charity’s relevant regulator when issuing a modified audit opinion or an audit report containing an emphasis of matter or material uncertainty related to going concern paragraph, or when issuing a qualified independent examiner’s report identifying matters of concern to which attention is drawn.
The FRC have also reminded auditors of their duties under law and highlighted guidance in its Practice Note 11: The Audit of Charities in the United Kingdom, revised November 2017.