The Charities (Accounts and Reports) Regulations 2005

Annual audit of charity accounts

7.—(1) The duties of an auditor carrying out an audit of the accounts of a charity under section 43 of the 1993 Act(1) shall be those specified in the following provisions of this regulation.

(2) Where a statement of accounts has been prepared under section 42(1) of the 1993 Act for the financial year in question the auditor shall make a report on that statement to the charity trustees which—

(a) states the name and address of the auditor and the name of the charity concerned;

(b) is signed by him or, where the office of auditor is held by a body corporate or partnership, in its name by a person authorised to sign on its behalf and states that the auditor is a person falling within paragraph (a) or, as the case may be, (b) of section 43(2) of the 1993 Act;

(c) is dated and specifies the financial year in respect of which the accounts to which it relates have been prepared;

(d) specifies that it is a report in respect of an audit carried out under section 43 of the 1993 Act and in accordance with regulations made under section 44 of that Act;

(e) states whether in the auditor’s opinion—

(i) the statement of accounts complies with the requirements of regulation 3 or, as the case may be, 4, or 5 above;

(ii) the balance sheet gives a true and fair view of the state of affairs of the charity at the end of the financial year in question; and

(iii) (aa) where regulation 3 applies, the statement of financial activities gives a true and fair view of the incoming resources and application of the resources of the charity in the financial year in question;

(bb) where regulation 4 applies, the statement of total return gives a true and fair view of the incoming resources and application of the resources of the investment fund in the financial year in question;

(cc) where regulation 4 applies, the statement of movement in funds gives a true and fair view of the movements in the net assets of the investment fund between their position at the beginning of that year and their position at the end of that year; and

(dd) where regulation 5 applies, the income and expenditure account gives a true and fair view of the income and expenditure of the charity in the financial year in question.

(f) Where the auditor has formed the opinion—

(i) that accounting records have not been kept in respect of the charity in accordance with section 41 of the 1993 Act; or

(ii) that the statement of accounts does not accord with those records; or

(iii) that any information contained in the statement of accounts is inconsistent in any material respect with any report of the charity trustees prepared under section 45 of the 1993 Act in respect of the financial year in question; or

(iv) that any information or explanation to which he is entitled under regulation 9 below has not been afforded to him,

contains a statement of that opinion and of his grounds for forming it.

(3) Where a receipts and payments account and statement of assets and liabilities have been prepared under section 42(3) of the 1993 Act for the financial year in question the auditor shall make a report on that account and statement to the charity trustees which—

(a) states the name and address of the auditor and the name of the charity concerned;

(b) is signed by him or, where the office of auditor is held by a body corporate or partnership, in its name by a person authorised to sign on its behalf and states that the auditor is a person falling within paragraph (a) or, as the case may be, (b) of section 43(2) of the 1993 Act;

(c) is dated and specifies the financial year in respect of which the accounts to which it relates have been prepared;

(d) specifies that it is a report in respect of an audit carried out under section 43 of the 1993 Act and in accordance with regulations made under section 44 of that Act;

(e) states whether in the auditor’s opinion—

(i) the account and statement properly present the receipts and payments of the charity for the financial year in question and its assets and liabilities as at the end of that year; and

(ii) the account and statement adequately distinguish any material special trust or other restricted fund of the charity;

(f) where the auditor has formed the opinion—

(i) that accounting records have not been kept in respect of the charity in accordance with section 41 of the 1993 Act; or

(ii) that the account and statement do not accord with those records; or

(iii) that any information or explanation to which he is entitled under regulation 9 below has not been afforded to him,

contains a statement of that opinion and of his grounds for forming it.

(4) The auditor shall, in preparing his report for the purposes of paragraph (2) or, as the case may be, (3) above, carry out such investigations as will enable him to form an opinion as to the matters specified in sub-paragraph (e) and (f) of that paragraph.

(5) The auditor shall immediately make a written report to the Commissioners on any matter of which the auditor becomes aware in his capacity as such which relates to the activities or affairs of the charity or of any institution or body corporate connected with the charity and which the auditor has reasonable cause to believe is, or is likely to be, of material significance for the exercise, in relation to the charity of the Commissioners' functions under section 8 (general power to institute inquiries) or 18 (power to act for protection of charities) of the 1993 Act.

(6) Where an auditor appointed by charity trustees ceases for any reason to hold office he shall send to the charity trustees a statement of any circumstances connected with his ceasing to hold office which he considers should be brought to their attention or, if he considers that there are no such circumstances, a statement that there are none; and the auditor shall send a copy of any statement sent to the charity trustees under this paragraph (except a statement that there are no such circumstances) to the Commissioners.

(7) In the case of an auditor appointed by the Commissioners, the report required by paragraph (2) or, as the case may be, (3) above shall be made to the Commissioners instead of to the charity trustees.

(1)

Section 43 was amended by section 28 of the Deregulation and Contracting Out Act 1994.