Citizens Advice has appointed Crowe Clark Whitehill as its new auditor, replacing Baker Tilly who quit the account over a disagreement about the way the charity treats its pension deficit in its accounts.

Baker Tilly held the audit account for the past four years but announced at the charity’s AGM in September that it would not stand for reappointment.

Since becoming its auditor, Baker Tilly qualified the charity’s accounts every year because Citizens Advice does not include its pension liability on its balance sheet. The latest accounts, for the year ending 31 March 2011, were filed with the Charity Commission last week and also carry a qualified opinion.

Explaining the basis for the qualified opinion this year, Baker Tilly wrote: “In our opinion the existence of an agreed contribution statement provides a sufficiently reliable estimate of the liability such that the net present value of the future payments should be included as a provision on the face of the balance sheet under Financial Reporting Standard 12.

“Based on a discount rate used in the actuarial valuation a provision should be made as at 31 March 2011 of £12,036,000.”

This would reduce the figure on the balance sheet for total assets less all liabilities and accumulated unrestricted funds, by the same amount, the auditors said.

Crowe Clark Whitehall confirmed to civilsociety.co.uk this morning that it has taken over the account. Its head of not-for-profit Pesh Framjee said the auditor did not know how it would approach the pension deficit until it had conducted the audit.

However, he is understood to favour the position that FRS17 takes precedence in such circumstances, meaning that for multi-employer schemes the deficit does not have to go onto the balance sheet.