Posted: 30 / 10 / 2023

Article by: Emma Houghton, Head of London Charity and Compliance

No matter the size, charities are 100% accountable for the funds they receive and how they spend those funds. Keeping records up to date and in good order is not only a requirement, but essential to enable you to manage your charities resources responsibly.

It can be difficult to understand exactly where your charity fits in relation to external scrutiny and whether an Independent Examination or Audit is required, but Sedulo is here to help.

So, what is an Independent Examination?

An Independent Examination is more than just checking numbers and ticking a box, but like an audit, it is a form of scrutiny to ensure that everything is accounted for correctly. Its purpose is also to give the charity’s trustees, supporters, beneficiaries and the wider public, some independent assurance that the charity is operating as it should.

As part of our work, we will understand how your charity is structured including funding and activities, review your accounting records, identify any financial risks, and ensure that all legal obligations have been met.

When is an Independent Examination required?

There are some cases where audit must be carried out:

  • If the charity’s Governing Document specifically requires
  • If a grant agreement document has specified that audited financial statements must be prepared
  • If the charity trustees have decided an audit must be done

But aside from those noted above, the level of scrutiny is based on the income your charity receives each year. We have summarised the thresholds below:

Income £0 – £25,000Accounts can be prepared on a Receipts and Payments basis.
No Independent Examination required
Income £25,000 – £1,000,000 but gross assets below £3,260,000Independent Examination required
Income over £1,000,000Audit required
Gross assets more than £3,260,000Audit required

Get Independent Examination support

If you have any questions or would like to get in touch for assistance on your next Independent Examination, then please connect with me and our expert charities team who will be happy to help.