Like a business, a charities and non profit organisations needs to manage their money and resources in a responsible and efficient manner. Unlike a business, though, a charity must undertake an annual examination of its accounts to make sure everything is going well.
This comes in the form of a required audit or independent examination of the charity accounts. This can be an involved process. The charity should know the process and what kind of professionals it should consider for the examination.
Employing an experienced Charity accountant goes a long way in making sure you have the right financial systems to run your charity properly
These independent examinations provide confidence that the charity uses its donations and funds well. If they take this process with the utmost seriousness, it can give them confidence from the public.
What is an Independent Examination of Charity Accounts?
Assuming a charity does not have a mandate for a government audit, the charity can instead opt for an independent examination of their charity accounts. This examination is a simpler affair and only needs to provide a basic assurance that there are no problems.
An independent examination takes the records of the various charity accounts. They then compare them to any and all public records of the charity’s expenses. This is not to provide a detailed look at the why and how a charity spends its funds. They only need to show that the funds match the spending records.
An independent examiner also does not have to note any specifics in their report unless there is a major cause for concern. A logical explanation regarding the expense from the trustees is often enough. If they have no alarms regarding the misuse of funds, they often ignore the specifics.
Which Charities Need an Independent Examination?
To require an independent examination, a charity’s annual income must be at least £25,000. If a charity is too small to reach this level, it can often ignore any examinations or audits.
As well, if a charity is still not large enough, they can choose an independent examination over an audit. This means they make less than £1 million in annual income.
Some charities are exempt from these requirements altogether.
Who Can Be an Independent Examiner for Charity Accounts?
The independent examiner must not have any relation or connection to the charity itself. They need to have a licensed ability to perform the examination, such as a license for accountants or bookkeepers.
Many private accounting companies provide examination and audit services that meet the requirements of a charity examination. Those who specialize in dealing with non-profit organizations, such as the accountants at KG Accountants, can provide their expertise in getting the highest quality of examinations.
What Are the Benefits of Charity Accounts Being Professionally Examined?
An independent examination provides proof to the trustees, stakeholders, and the public that the charity runs with quality leadership and proper organization. With these annual reports, the public can keep their trust that the charity can handle their donations.
An independent examination is a lighter touch over an audit. It is often cheaper and faster as it does not require intense scrutiny of expenses from the entire year. Many charities can take on an independent examination without worry.
Getting the Best Accountants With KG Accountants
Making sure charity accounts are in proper order is vital. Every charity should look into skilled and specialized accountants to give them the best, quality independent examinations.
KG Accountants are Central London Accountants who have a unique specialization that covers all aspects of finances and tax information for charities, Clubs and various non-profit businesses. To get more information, their contact information is here.
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