Are you a Charity or an SME, and worried whether your organisation/company is exempt from or qualify for partial exemption from audit? Why not see what you really need before calling your expensive accountants for another audit …
Income thresholds and Audit requirements
The Charities Act 2006 has introduced new thresholds and terminologies. Unincorporated Charities are now referred to as: Non-Company Charities while Incorporated Charities are now called: Company Charities.
The table below illustrates the new thresholds and reporting requirements. Requirements under Category Two also covers Social Enterprises and Community Interest Organisations (CIOs)
CATEGORY ONE
Non-Company Charities
Annual gross income
Type of accounts
Type of external scrutiny
Below £10,000
Receipts and payments option
No Scrutiny*
Above £10,000 but
below £500,000
Accruals Accounts
Independent Examination
If assets more than £2.8m and its income is over £100,000
Accruals Accounts
Full Audit
CATEGORY TWO
Company Charities
Annual gross income
Type of accounts
Type of external scrutiny
Below £90,000
Accruals Accounts
No Scrutiny*
Above £90,000 but Below £500,000
Accruals Accounts
Accountant’s Report
Above £500,000
Accruals Accounts
Full Audit
CATEGORY THREE
Small & Medium-sized Enterprises – SMEs
Annual gross income
Type of accounts
Type of external scrutiny
Below £5.6m and Balance sheet total not more than £2.8m
Accruals Accounts
Accountant’s Report
*An Independent Examination or Accountant’s Report may become necessary if required by:
Governing documents
Funders, and
Trustees / Directors decide it as part of best practice approach
