All charities must prepare annual accounts and most have to prepare trustees’ annual reports. A summary of the regulations is given here that will be enough for trustees to manage the accounts properly but for a full account of the requirements please refer to the appropriate links

Charity Commission. The organisation responsible for regulating Charities in England and Wales

The Charities’ Statement of Recommended Practice (Charities SORP) provides recommendations for the format and content of charity reports and accounts. It applies to charities that prepare accruals accounts to give “a true and fair view.”

Charity Reporting and Accounting: The essentials (CC15) Guidance from the Charity Commission for the accounting requirements for different sizes and types of charities when preparing accounts and reports. The following summarises the two options for keeping accounts

Small, non company charities that have an income of £100,000 or less can choose to prepare receipts and payments accounts (the simplest form of accounts). The Receipts and Payments Accounts Pack (CC16) provides a template for 'receipts and payments’ annual report and accounts and provides a simple approach for small charities who do not wish to prepare full accrual accounts

Charities wishing to produce accruals accounts are encouraged to use the Accruals Accounts Pack (CC17)

Independent Examination of the accounts should be carried out by asuitably skilled person. Advice on the appointment of and the duties of an independent examiner and the preparation of an independent examiner’s report is available. Examination of Charity Accounts by Independent examiners also have a duty to report matters of material significance to the Commission. Revised guidance CC31 - Independent Examination of Charity Accounts explains for trustees what an independent examination is and how to go about selecting your examiner. For examiners the guidance sets out what is requiredand how to make up the examiner’s report

Small, non company charities that have an income exceeding £100,000 but are below the audit threshold (gross annual income over £500k or total assets of more than £2.8m) can use the Accruals Accounts Pack (CC17)when preparing their accounts on an accrual basis. The pack provides a template for the layout and content of the trustees’ annual report and accounts.

Charities preparing accruals a24-May-2011 with the SORP and knowledge of the SORP is essential if the Accruals Accounts Pack (CC17) is not being used.

Larger non-company and Company charities are required to prepare accounts on an accruals basis and therefore are required to use the SORP

Charities Accounts (Scotland) Regulations In most aspects these are identical to those of the Charity Commission for England & Wales

The accounting period (i.e. the time that a charity has to submit its accounts to OSCR) is 9 months. This matches up with the same period that is to be introduced under company law.

The regulations bring the The Charities’ Statement of Recommended Practice into legal effect in Scotland

A list of who counts as professionally qualified appears in the regulations. If a charity produces accrued accounts, even though its income is less than £100,000 it must still have them examined by a professionally qualified person rather than an independent examiner

A charity with an income of £500,000 or more must have an audit by a professional auditor

The Office of the Scottish Charity Regulator (OSCR)’s monitoring process will be the route by which annual accounts are submitted

Accounting records must be kept for 6 years after the end of the financial year to which they refer

Office of the Scottish Charity Regulator (OSCR) Is tasked with the job to ensure a flourishing charity sector in Scotland in which the public has confidence. Their inital objectives are

to increase transparency and public accountability of charities

to increase public confidence in charities through effective regulation

to increase charity trustees' awareness of their statutory responsibilities

to establish and maintain OSCR as a trusted, effective and innovative regulator

to reduce the burden of regulation on charities wherever possible, with particular emphasis on reducing multiple reporting

OSCR provides fully detailed guidance documents

Scottish Charity Accounts - Part 1 Overview. Provides an introduction to the main provisions of the Act and the Regulations and contains three flowcharts in order that charities can easily identify: whether they should prepare their accounts on the basis of receipts and payments or accruals, and whether their accounts should be subject to an independent examination or audit. The Overview should be read in conjunction with Part 2 for receipts and payments accounts or Part 3 for fully accrued accounts

Scottish Charity Accounts - Part 2 Receipts & Payments accounts. Provides detailed guidance on preparing receipts and payments accounts that comply with the Regulations and covers the relevant external scrutiny options. A simple example account is also provided along with an example independent examiner's report

Receipts & Payments Workpack

Scottish Charity Accounts - Part 3 Fully Accrued Accounts outlines the requirements for accounts prepared on an accruals basis, the relevant external scrutiny options and directs readers to where examples of accrued accounts can be found. An example of an independent examiner's report is also included

 

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Last Update 08-Jan-2012

Date first published 16-Dec-2005