The 2008 Regulations set out the basic legal requirements and more guidance is given in SORP. Where these documents are required to be submitted to the commission, this must be done within 10 months of the end of the financial year to which they refer, although the commission would encourage charities to file well before the deadline.While some basic requirements apply to all charities, exactly what is needed will depend on a number of factors such as the income, gross assets or constitution of the charity.Some basic requirements apply to all charities. It also details the deadline for submitting accounts and returns to the Charity Commission, and when independent examination or professional audit of a charity’s accounts is required. Group accounts are prepared in accordance with legal requirements and UK accounting standards and present the results of the whole group on a consolidated basis with the trustees’ annual report and accounts submitted by the ‘parent’ charity including the financial results of the whole group.Independent examination: this is a less onerous form of scrutiny than an audit. Registered charities must also prepare a trustees’ annual report to accompany their accounts. If an independent examination is chosen and gross income exceeds £250,000 then the independent examiner appointed must be a member of a body specified under the Charities Act. These provide a template to produce accounts in the required form.External scrutiny: there is no requirement to have the accounts independently examined or audited, unless the charity’s governing document stipulates it, but the commission does have the power to require an audit in exceptional circumstances.Type of trustees’ annual report: a trustees’ annual report must be prepared (unless excepted from registration) but it may be simplified (see Information to be sent to the commission: these charities should not send the commission a copy of their trustees’ annual report and accounts unless it asks for them.They must, however, file an annual return with the commission online within ten months of the end of their financial year if their yearly income is over £10,000.If the income is less than £10,000, they can use the annual return form to update their register details, which includes trustee details. The legal requirements are set out in The basic contents of the trustees’ annual report are mandatory. The trustees cannot normally spend permanent endowment without the commission’s authority. The requirements of the 2008 Regulations, including simplifications for charities which are not required to have a statutory audit, are set out in section 7.Annual return: this must be completed and submitted to the commission by trustees of registered charities with a gross income for the year of over £10,000 and by all CIOs.
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The Charities (Accounts and Reports) Regulations 2008 require the methods and principles of SORP to be followed when accounts are prepared under the Charities Act. On the other hand ‘audit by a qualified accountant’ suggests that a statutory audit by a registered auditor is required, even if the charity is small and not required to have an audit by legislation.Trustees of charitable companies can amend their articles of association to change any specific provisions which might exceed the statutory provisions.
CIOs preparing their accounts on a receipts and payments basis should note that they are required to make two specific disclosures regarding guarantees and debt and should refer to the receipts and payments pack for more information.External scrutiny: CIOs must have an audit if either of the following conditions are met in the financial year:Where an audit is not required under the Charities Act or by its governing document an independent examination is required if the CIO’s gross income is more than £25,000 in the financial year.