Regulators begin search for partners to help set accounting rules for charities

04 Nov 2019 News

The UK's charity regulators are now seeking engagement partners to help reform the process of setting accounting rules.

Earlier this year a governance review of the Statement of Recommended Practice (SORP) made several recommendations for reform, which have all been accepted by the Charity Commission for England and Wales, OSCR the Scottish Charity Regulator, and the Charity Commission for Northern Ireland, which make up the SORP-making body, as well as the Charities Regulator in Ireland which is an observer. 

The SORP is the set of rules which governs accounting for charitable companies and charities with an income over £250,000. Seven stakeholder groups are being set up to involve individuals and organisations with an interest in developing the next version.  

Those selected as engagement partners can be individuals or organisations, as long as they have an interest in charity financial reporting and the work of the sector.

The partners will be put into stakeholder groups based on their main areas of work. The groups will be asked for their view on the information needs of users of charity annual reports and accounts and how far the SORP needs to change to meet those needs. They will also be asked what information users of the SORP need to prepare for good annual reports and accounts.

'There is a degree of uncertainty as to how much time and effort is being sought'

A statement to potential partners reads: “We intend the new SORP engagement process to be flexible and creative and so at the outset we are not setting out a strict format that each engagement strand must follow. 

“Therefore at the outset there is a degree of uncertainty as to how much time and effort is being sought. Instead at the initial meeting of each strand, the participants will agree amongst themselves the approach they would like to take to the process and how much time and effort will be asked of participants.”

The Charity Commission’s Nigel Davies, joint chair of the SORP Committee said: “We are committed to helping charities meet public expectations, and so we want to see an accounting framework that best serves the reader of the report and accounts and the wider public interest in the activities of charities. I encourage anyone with an interest to come forward to help develop improvements in reporting for the sector.”

Myles McKeown, joint chair of the SORP Committee and head of compliance and enquiries at the Charity Commission for Northern Ireland, said: “Northern Ireland charities with an income over £250,000 have been legally required to apply the charity SORP since 2016. Now is the time to build on your experience and contribute to the development of the next SORP, with the aim of making charity financial reporting better and more appropriate for the sector and for everyone who reads your accounts.”

Information on how to apply can be found here. The closing date for applications is 31 January 2020.

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