Independent Examiner – Eligibility and Skills

Independent Examination of Accounts CC32Charity law requires those charities with a gross income threshold of more than £25,000 to have some form of external scrutiny of their accounts. The trustees may opt for an independent examination if their charity’s income is not more than £1m, or where gross income exceeds £250,000

The appointment of an independent examiner is made by the trustees who must reasonably believe that the person selected has the requisite ability and practical experience to carry out a competent examination of the accounts.

The skills required of an examiner will depend on whether accounts are prepared on a receipts and payments basis or an accruals basis, and the size and nature of the charity’s transactions.

All examiners need some familiarity with certain basic principles of fund accounting, the responsibilities of trustees, and the charity’s governing document.

A person with financial awareness and numeracy skills should have the requisite ability to act as an independent examiner for receipts and payments accounts.

For accruals accounts the examiner should have a good understanding of accountancy principles, accounting standards and knowledge of the applicable SORP.

Depending on the complexity of the charity to be examined, prospective examiners may also need to have practical experience relevant to the charity in question which might include:

  • an involvement in the financial administration of a charity of a similar nature
  • having acted successfully as an independent examiner on previous occasions for similar charities
  • relevant practical experience in accountancy or commerce
  • a working knowledge of charity accounting

Independent examination of accruals accounts

Having the requisite ability is important to ensure that the examiner undertakes a competent examination. A competent examination is one conducted with reasonable skill and care in accordance with the Directions for independent examination. Trustees who have had the charity’s accounts prepared on an accruals basis should select a person who is a member of one of the accountancy bodies listed in the 2011 Act as amended by the 2015 Order.

The examiner should be satisfied that they have the requisite ability with the necessary skills before undertaking the examination of accounts prepared on the accruals basis. When examining accounts prepared on an accruals basis the examiner should be a member of one of the accountancy bodies listed and the examiner must be a member of a listed body if the charity’s gross income exceeds £250,000.

The listed bodies are:

  • Institute of Chartered Accountants in England and Wales
  • Institute of Chartered Accountants of Scotland
  • Institute of Chartered Accountants in Ireland
  • Association of Chartered Certified Accountants
  • Association of Authorised Public Accountants
  • Association of Accounting Technicians
  • Association of International Accountants
  • Chartered Institute of Management Accountants
  • Institute of Chartered Secretaries and Administrators
  • Chartered Institute of Public Finance and Accountancy
  • Fellow of the Association of Charity Independent Examiners
  • Institute of Financial Accountants
  • Certified Public Accountants Association

Ted Cassidy

img078Ted Cassidy started up CAS here in Derby in 1991, and he worked as Community Accountant until he retired in 1997.

Since then he has continued his links with DCAS in the background, acting as our Independent Examiner, and continuing to offer great support to the service whenever it has been needed.

Ted has now announced his retirement from this role, and we wish both him and his wife Una a long and happy retirement.

In recognition of the important roles that Ted has held in support of DCAS, supported by Una, the Trustees have announced that they intend to appointed them Honorary Presidents of Derby Community Accountancy Service.