An alternative to "overbearing and over-expensive" auditing of smaller charities may be implemented on the back of Lord Hodgson's review, president of the Institute of Chartered Accountants for England and Wales Mark Spofforth said yesterday.
As part of Rathbones’ Annual Charity Symposium in London’s British Museum, Spofforth delivered a presentation that examined Lord Hodgson’s review of the Charities Act 2006 in light of any impact it could have on the regulatory framework.
He speculated that Hodgson’s recommendation to raise the audit limit for charities may result in a reduction in the number of charities from the lower end of the income scale that are required to audit their accounts.
“We may find in the future that there will be less audited sets of accounts,” Spofforth said. “There is a feeling that audit as a service may be overbearing and over-expensive for some of the smaller charities.”
He added that this was interesting in the light of changes in legislation in the corporate sector over the last couple of days, where audit limits have already gone up.
“It would be up to us – my institution in particular – to find ways of still giving the public the information they need so they can continue to trust charities,” Spofforth said.
Commission registration fee ‘probably soon’
The ICAEW president also recommended making reports more user-friendly, for “the person who wants to just dip in and dip out of a set of accounts”, and added his weight to the speculation that the Charity Commission may soon start charging charities a registration fee.
“How does the Charity Commission pay for itself?,” he asked. “Probably what we will soon see is a fee for registering charities, in just the same way Companies House does. We need to be ready for that.”
Newly-appointed Commission chair William Shawcross mentioned last week that he would “look very seriously at the suggestion” which he described as “sensible”.
Spofforth, newly appointed himself this summer, described Lord Hodgson’s Review of the Charities Act 2006 report as, on the whole, a thorough, practical and readable document.