The Charities Accounts (Scotland) Regulations 2006

Explanatory Note

(This note is not part of the Regulations)

These Regulations provide for the detailed accounting requirements that a charity registered in the Scottish charity register must follow. It applies to charities with a financial year which begins on or after 1st April 2006.

Regulation 3 sets out how, for the purpose of these regulations, the first financial year, subsequent financial years and the accounting reference date of a charity is to be determined.

Regulations 4 and 5 require charities to keep accounting records and to submit a statement of account to the Scottish Charity Regulator (“OSCR”) at the end of each financial year.

Regulation 6 requires a charity with subsidiary undertakings to prepare consolidated accounts in addition to each charity’s obligation to prepare a separate statement of account in accordance with either regulation 8 or 9.

Regulation 7 gives connected charities (which share common, parallel or related charitable purposes and administration) the option of preparing accounts collated into a single document to send to OSCR, instead of each having to prepare a separate statement of accounts in accordance with either regulation 8 or 9.

Regulations 8 and 9 require charities to prepare one of two different types of statement of account (fully accrued and receipts and payments accounts), depending on the gross income level of the charity in a financial year. Regulation 8 and schedule 1 and regulation 9 and schedule 3 contain detailed requirements as to the form and content of each type of statement of account. Schedule 2 specifies the information which must be included in an annual report prepared by a charity that prepares receipts and payments accounts. Regulation 8 and schedule 1 provide that the annual report for fully accrued accounts is to be prepared in accordance with the statement of recommended practice for accounting and reporting by charities.

Regulations 10 and 11 provide that charities are either required to have their statement of account audited or independently examined, depending on the gross income level of the charity in a financial year. They also set out the auditor and independent examiner’s duties and the criteria for eligibility.

Regulation 12 provides that charities that are companies that have had an accountant’s report prepared in terms of sections 249A, 249B, 249C and 249D of the Companies Act 1985, are not also required to have their statements of accounts audited or independently examined in accordance with regulations 10 or 11.

Regulation 13 provides that auditors and independent examiners are entitled to request from charity trustees or employees of a charity any books, documents and other records which relate to the charity concerned.

Regulation 14 provides that the charities listed in schedule 4 of the Regulations, Further and Higher Education Institutes and Registered Social Landlords should prepare their statements of account in accordance with their own specialist industry statements of recommended practice.