The Charity Commission is currently updating its publications but what action might a finance director, or independent examiner, or auditor need to take?
The basic advice is that reference should be made to the 2011 Act in any document, in this case the accounting policies, an audit or independent examination report, that is prepared on or after 14 March 2012, irrespective of the financial year to which that document refers.
The simplest approach is to refer to the provision of the Charities Act 2011 on documents executed following the Act's implementation and to refer to the provisions of the Charities Act 1993 (or other relevant charity legislation) in documents executed before the implementation of the 2011 Act.
Independent examiners would therefore note that:
- their examination of the accounts was under section 145 of the Act
- they follow the directions made under section 145 (5) (b) of the Act
- the charity keeps accounting records under section 130 of the Act
- the accounts comply with the requirements of the 2011 Act
- the Auditing Practices Board is updating its model example audit reports.
Similarly, if preparing accounts, reference should be made to the 2011 Act where the compilation of those accounts is completed on or after 14 March 2012, irrespective of the financial year to which those accounts refer. For example, the accounts of a charity which is not established under company law would comply with Part 8 of the Charities Act 2011. The accounting policies might then advise: ‘the financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice: Accounting and Reporting by Charities (SORP 2005), issued in March 2005, UK Accounting Standards and the Charities Act 2011’.
There is no requirement to go back and change the Charities Act references in a document that has already been finalised before 14 March 2012.
Finally, even if a repealed provision were to be inadvertently stated after 14 March 2012 in a document, schedule 8 of the 2011 Act provides that the effect is as if the relevant section of the Charities Act 2011 had been cited.
