When Auditors Should Report Matters to Charity Regulators

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New guidance has been published in the UK on how and when auditors should report matters to charity regulators. This is an important change in the relationship between auditors and the charities regulator – covering matters that would not have been explicitly reported on previously.

The guidance applies when reporting to the Charity Commission for Northern Ireland and covers both auditors and independent examiners. It also deals with charities regulated across the UK. It applies when an audit report is signed off on/after 1 May 2017 and covers a range of matters outlined below.

It is perhaps only a matter of time before these areas are also covered by regulatory reporting requirements in the Republic of Ireland.

There are nine key areas that must be reported:

  1. Where there are concerns that conflicts of interest and related party transactions have not been properly managed or declared;
  2. Where an audit report is modified, or contains an emphasis of matter paragraph (such as for going concern);
  3. Failure(s) of internal controls, including matters of governance, that resulted in, or could result in, loss or risk to, charitable funds or assets;
  4. Matters suggesting dishonesty or fraud involving loss, or risk to, charitable funds or assets;
  5. Evidence that the charity’s activities put its beneficiaries at risk of abuse or mistreatment;
  6. Breaches of legislative requirements, including charitable funds being misapplied;
  7. Evidence of a deliberate or significant breach of an order or direction made by a charity regulator;
  8. Knowledge or suspicion that the charity, trustees, employees or assets have been used to support terrorism; and
  9. Knowledge or suspicion that charitable funds have been used for money laundering.

For more on this and other topics affecting charities in Ireland, come to our next CPD event on 30 November 2017.

Booking and further details are available here 

Other courses are available at Ticket Tailor here