Consultation launched on implementation of new accounting and reporting changes

Finance | 1 Jul 2007

The Office of the Third Sector has launched a sector consultation to help decide how new accountancy and reporting provisions introduced by the Charities Act 2006 will be implemented and supported by regulations.

These include the proposal that the trustees' annual report should be used to report on charities' public benefit. The OTS has recognised that respondents to the consultation may wish to limit their response to this proposal, so an extract of the full consultation document and draft regulations has been prepared focusing on this issue.

In particular, the government is seeking views on three points. Firstly, whether it is appropriate for charities to report publicly how they meet the public benefit requirement. Secondly, whether the annual report of a charity is the best medium through which to report it, and finally, whether the draft regulations achieve the right balance between reporting public benefit and the regulatory cost of providing such information.

Other key changes up for consultation include harmonising the audit and independent examination requirements for company and non-company charities, by applying the Charities Act audit or examination requirements to small company charities; providing a statutory framework for the preparation and audit of group accounts, already recommended by the charity Sorp, and generally accepted practice in the sector; a clearer whistleblowing duty and protection for auditors and independent examiners brought into primary legislation; and updated account requirements for common investment fund charities.

The consultation will run until 14 September 2007. The proposal is for the changes to be implemented for financial years starting on or after 1 January 2008.

Directory: Charity Commission | Office of the Third Sector

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