The Auditing Practices Board (APB) has today issued Bulletin 2009/1 which supplements the guidance contained in Practice Note 11: ‘The Audit of Charities in the UK’ by providing illustrative examples of auditor’s reports for charities that are registered:

• In England and Wales,
• In Scotland, and
• In both jurisdictions.

Recent changes in UK company law and charities legislation in both England and Wales and Scotland affect the appropriate wording to be used in auditor reports. The interaction between this legislation, and the existence of different audit exemption thresholds in company law and charity law, results in a degree of complexity.

The illustrative auditor’s reports for corporate charities included in Bulletin 2009/1 are based on the Companies Act 1985 and are targeted at charities with 31 March 2009 year ends. For corporate charities with accounting periods beginning on or after 6 April 2008 the Companies Act 2006 will apply and APB plans to update the Bulletin to reflect this later in 2009.

Richard Fleck, Chairman of APB commented:

"The legislative environment surrounding the charity sector is complex and the detailed wording of auditor reports requires careful consideration. There are a large number of different possibilities depending on the legal structure of the charity and the jurisdiction in which it operates. While the Bulletin does not contain an example to cover every possibility, APB hopes that the examples that are provided will be helpful in assisting auditors shape their own, client specific, auditor reports."

A copy of the Bulletin may be downloaded free of charge from the publications section of the APB’s web site (www.frc.org.uk/apb).

1. The Financial Reporting Council (FRC), the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
2. The APB is committed to leading the development of auditing practice in the United Kingdom and the Republic of Ireland so as to:
   • establish high standards of auditing;
   • meet the developing needs of users of financial information; and
   • ensure public confidence in the auditing process.
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