Charity regulators launch consultation on how accounting rules are set

27 Nov 2018 News

Charity regulators have opened a consultation on how to reform the process for developing the Statement of Recommended Practice, the set of rules which govern charity accounting.

The SORP oversight panel, comprising of representatives from the charity regulators in Scotland, Northern Ireland, Republic of Ireland, England and Wales, launched the consultation yesterday.

Over the last 18 months there has been mounting pressure for reform of the exisiting process.

Joe Saxton resigned from the SORP committee in autumn 2017, saying the process was "technical and full of jargon".

Similarly, Nigel Davies, head of accountancy services at the Charity Commission, and Laura Anderson, head of professional advice and intelligence at OSCR, said in an article for Civil Society Voices this year that charity accounting is “not best served” by its current focus on cash flow and surplus.

The panel, chaired by Professor Gareth Morgan, is looking for suggestions to ensure the SORP best serves the needs of those seeking information about charities as well as the sector itself.

It will use the responses, alongside feedback collected from events and discussions, to help it to decide how the SORP is developed in future and what reforms are needed.

The consultation will run until 4 February 2019, with a summary of responses published no later than 30 April.

'Transparency is critical'

Morgan said: “The way in which the SORP is developed is crucial. That is why I am delighted that the four charity regulators in the UK and Ireland have, for the first time ever, established this panel to review the governance processes in the development of the SORP and to make recommendations for the future.”

Sarah Atkinson, director of policy, planning and communications at the Charity Commission for England and Wales said: “Charities need to demonstrate that they meet the legitimate expectations of the public in everything they do.

“Transparency about the work they carry out and how their money is spent is critical to maintaining public trust. It is therefore vital that the process for developing the accounting framework inspires confidence and enables charities to report clear, reader-friendly information.”

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