Independent examiner’s report for an unincorporated charity (receipts and payments basis for accounts preparation)[ACCA 1]
My service to you
My examination will be carried out in accordance with the Directions and guidance produced by the [Charity Commission/Office of the Scottish Charity Regulator/ The Charity Commission for Northern Ireland/ other regulator].
My examination will involve comparing the accounts with the accounting records and making limited enquiries of the charity’s officers. In certain circumstances I shall look for independent evidence to support entries in the accounting records or in the presentation of the accounts.
The responsibility for safeguarding the assets of the charity and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the trustees. My examination should not be relied on to disclose all such material misstatements or fraud, errors or instances of non-compliance as may exist.
As part of my normal procedures, I may request you to provide formal representations concerning certain information and explanations I have received from you during the course of my examination.
In order to assist me with my examination of your accounts, I will request sight of any documents or statements that will be issued with the accounts. This will include the trustees’ report. I am also entitled to attend all general meetings of the charity, and to receive notice of all such meetings.
It is not the purpose of my examination to identify all significant weaknesses in the charity’s systems, but if any such weaknesses come to my attention, I shall report them to you. If this situation occurs, the report should not be provided to any third party without my consent.
Once I have issued my report I have no further direct responsibility in relation to the accounts for that financial year. However, I expect that you will inform me of any material event occurring between the date of my report and that of the annual general meeting that may affect the accounts.
My responsibility to you
I have set out the agreed scope and objectives of your instructions within the engagement letter. Any subsequent changes will be discussed with you and where appropriate a revised schedule of services will be agreed. I shall proceed on the basis of the instructions I have received from you and will rely on you to tell me as soon as possible if anything occurs which renders any information previously given to me as incorrect or inaccurate. I shall not be responsible for any failure to advise or comment on any matter that falls outside the specific scope of your instructions. I cannot accept any responsibility for any event, loss or situation unless it is one against which it is the expressed purpose of these instructions to provide protection.
Your responsibility to me
The advice that I give can only be as good as the information on which it is based. In so far as that information is provided by you, or by third parties with your permission, your responsibility arises as soon as possible if any circumstances or facts alter, as any alteration may have a significant impact on the advice given. If the circumstances change therefore or your needs alter, advise me of the alteration as soon as possible in writing.
As trustees of the above charity, you are required by statute to prepare receipts and payments accounts for each financial year which present the receipts and payments of the charity for the period and its assets and liabilities at the end of the period, together with a trustees’ annual report in accordance with [section 133 of the Charities Act 2011 / section 44 of the Charities and Trustee Investment (Scotland) Act 2005 / section 64 of the Charities Act (Northern Ireland) 2008], as amended and regulations thereunder. In preparing those accounts you must:
- Select suitable accounting policies and then apply them consistently.
- Make judgements and estimates that are reasonable and prudent.
- Prepare the accounts on the going concern basis unless it is not appropriate to presume that the charity will continue in operation.
As trustees of the charity, you are responsible for maintaining proper accounting records and an appropriate system of internal control for the charity. You are also responsible for preparing the annual report and financial statements which give a true and fair view and have been prepared in accordance with applicable accounting standards and the Companies Act 2006 and regulations thereunder. It is also your responsibility to safeguard the assets of the charity and hence to take reasonable steps for the prevention of and detection of fraud and other irregularities with an appropriate system of internal controls.
You are also responsible for making available to me, as and when required, all the charity’s accounting records and all other relevant records and related information, including minutes of all trustees’ meetings along with access to all staff.
In accordance with [section 133 of the Charities Act 2011/section 44 of the Charities and Trustee Investment (Scotland) Act 2005/section 64 of the Charities Act (Northern Ireland) 2008], where the charity’s income in any financial year does not exceed £250,000, and if permitted by the charity’s governing document, the charity’s trustees may elect to prepare a receipts and payments account(s), a statement of assets and liabilities and trustees’ report as its annual statement of accounts. You have elected to prepare such an account and statement.
The intended users of the report are the trustees. The report will be addressed to the trustees.
My legal and professional duty is to state in my report whether any matters have come to my attention which, in my opinion, attention should be drawn to in order to enable a proper understanding of the accounts to be reached, and to report whether or not any matter has come to my attention in connection with the examination which gives me reasonable cause to believe:
- Proper accounting records have not been kept by the charity in accordance with [section 130 of the Charities Act 2011/section 44 of the Charities and Trustee Investment (Scotland) Act 2005/section 63 section of the Charities Act (Northern Ireland) 2008].
- The accounts and statement are not in agreement with the accounting records.
I have a statutory duty to report to the [Charity Commission/Office of the Scottish Charity Regulator/The Charity Commission for Northern Ireland/other regulator] such matters (concerning the activities or affairs of the charity or any connected institution or body corporate) of which I become aware during the course of my examination which are (or are likely to be) of material significance to the regulator in the exercise of their powers of inquiry into, or acting for the protection of, charities.
There are certain other matters that, according to the circumstances, may need to be dealt with in my report. For example, material breaches of trust or information not provided to me.
Under directions issued by the [Charity Commission/Office of the Scottish Charity Regulator/ The Charity Commission for Northern Ireland /other regulator], I am obliged to report to it any matters which I become aware of during the course of my examination, which give me reasonable cause to believe that one or more of the trustees has been responsible for deliberate or reckless misconduct in the charity’s administration.
Should you instruct me to carry out an alternative report then it will be necessary for me to issue a separate letter of engagement.
If as a result of the work I perform, I arrive at the conclusion that the charity is not entitled to exemption from an audit of the accounts, or if I am unable to reach a conclusion on this matter, I will not issue any report. I will provide you with written notification of the reasons for this.
I am also required to report any of the following matters that have become apparent during the course of the independent examination:
- Whether there has been any material expenditure or action which appears not to be in accordance with the trusts of the charity;
- Whether any information or explanation to which I am entitled has not been afforded to me: and
- Whether any information in the trustees’ statutory annual report is inconsistent in any material respect with that in the financial statements.
As trustees of a charity, you are under a duty to prepare an annual report for each financial year complying in its form and content with the [Charities Act 2011/ the Charities and Trustee Investment (Scotland) Act 2005/ Charities Act (Northern Ireland) 2008]. You should also have regard to Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities issued by the Charity Commission and the Office of the Scottish Charity Regulator in their role as the joint SORP-making body, recognised by the Financial Reporting Council.
As trustees, you are required to report as to whether you have given consideration to the major risks to which the charity is exposed, and to the systems designed to mitigate these risks. Compliance with the SORP requires you to confirm that these risks have been reviewed and that systems have been established to mitigate those risks. I am not required to audit this statement, or to form an opinion on the effectiveness of the risk management and control procedures.
Limitation of liability
My services as detailed above are subject to the limitations on our liability set out in the engagement letter and in paragraph 18 of my standard terms and conditions of business. These are important provisions, which you should read and consider carefully.
[There are no third parties that I have agreed should be entitled to rely on the work done pursuant to this engagement letter.]
You may request that I provide other services from time to time. If these services will exceed £500, I will issue a separate letter of engagement and scope of work to be performed accordingly.
Because rules and regulations frequently change you must ask me to confirm any advice already given if a transaction is delayed or a similar transaction is to be undertaken.
KiQi Chartered Certified Accountants
[ACCA 1]It should be noted that an independent examination is an individual appointment not a firm appointment