Charities Manual
Our Charities Manual provides you with the current and permanent file programmes needed to undertake an audit or independent examination for a charity in England and Wales, Scotland or Northern Ireland.
Limited company and unincorporated charities are covered, as well as Charitable Incorporated Organisations (both CIOs and SCIOs).
The manual also includes:
- accounts disclosure checklists for both accruals and receipts and payments accounts.
- guidance notes that summarise the current legal accounting, auditing and reporting requirements for charities.
Our Charities Manual can be browsed online or sections of content or commentary can be downloaded in Microsoft word or PDF. There is also the flexibility to ‘customise’ a download suitable for your engagement. For every new assignment, you will need to navigate to our website to obtain the most up to date version.
- Guidance notes that provide you with essential background knowledge on the charities sector. They cover the key aspects of the regulatory, accounting and reporting requirements for charities in the various jurisdictions of the United Kingdom.
- Example engagement letters for audit and independent examination of the various categories and jurisdictions of charities, including groups. There is also an example letter of representation.
- Example audit and independent examination reports for the various categories of charity, including groups.
- Example pro-forma accounts.
- Charity accounts disclosure checklists for both accruals and receipts and payments accounts.
- Permanent file documentation that provides a structure for your permanent files and outlines the information required which is of continuing importance to an audit or independent examination assignment over a number of years.
- Charity specific current file documentation comprising of two separate packs of documentation for audit and independent examination. The audit documentation provides you with the planning, completion and detailed work programmes needed to undertake an audit. Lead schedules and a current file index are also included. The independent examination documentation provides you with the planning, completion and work programmes needed to undertake an examination.
April 2022
This major update to the methodology principally incorporates:
- ISA (UK) 315 (Revised July 2020) Identifying and assessing the risks of material misstatement;
- ISA (UK) 240 (Revised May 2021) The auditor’s responsibilities relating to fraud in an audit of financial statement; and
- Consequential amendments as a result of the new quality management standards.
December 2021
The principal technical changes in this update relate to:
- Amendments as a result of the publication of the FRC Bulletin: Illustrative Auditor's Reports on United Kingdom Private Section Financial Statements (August 2021);
- Best practice amendments from internal review and client feedback; and
- Independence considerations for independent examiners.
May 2021
This update to the manual incorporated:
- Use of audit data analytics - a number of changes have been throughout the manual to encourage teams to consider the use of audit data analytics (ADA) on audit engagements. These changes principally focus on the use of ADA as part of the risk assessment, selection of high risk transactions for testing and stratification of populations to assist with sampling, although teams are encouraged to consider its use in other areas, with revisions to planning forms providing prompts for you to record its planned use. Given the audit quality and efficiency gains which can provided by the use of ADA, a new planning form (B20) has been added for teams to appraise its use on engagements and record why ADA was or was not considered appropriate to use. Where the use of ADA is intended, a number of other revisions have been made throughout the manual to help you record and reflect on the results from its use.
- Reporting on irregularities, including fraud - following the ICAEW publication of 'How to report on irregularities, including fraud, in the auditor’s report - Guide for auditors reporting for the first time' in April 2021 and the comment that 'how the auditor developed their explanation, and the areas considered, would be expected to be documented in the audit file', we have added a new A29 Reporting on irregularities, including fraud in the auditor's report in the Audit Methodology and also an additional test on A21 for the RI to confirm their approval.
March 2021
This update to the manual incorporated:
- FRC Ethical Standard 2019 - This update includes a revision to the Audit Manual ethical forms (B12 and B13).
- Brexit - Changes from company law and financial reporting standards have been incorporated throughout.
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