‘REMAIN cautious against the threat of fraud’ – that is the warning to charities by one tax adviser after Government introduced new legislation on auditing.
Mark Cummins, of Russell New, in Steyning, suggests fraud is constantly evolving and local charities, now exempt from audit requirements, need to review their financial controls and strategies regularly to meet new threats.
The current income threshold of £500,000 will rise to £1 million, although the asset threshold’ limit, where a statutory audit would be required for charities holding £3.26million of assets and receiving more than £250,000 of income, will remain in place.
For charities which can benefit from the increase in the income threshold and drop out of the statutory audit requirement, their accounts will still be subject to an independent examination by a qualified accountant where their income is above £250,000.
Mr Cummins said: “While there are obvious cost savings for charities falling out of the audit threshold it is important that trustees consider all factors including the potential increase to fraud before deciding whether to take advantage of the increased exemption level.
“Things such as comfort for trustees, greater assurance for stakeholders and a more thorough review of systems and control are areas which need to be looked at when considering the cost and benefit of the year end audit process.”
Russell New is hosting a free advisory event for charities on Thursday, March 26, at Sussex County Cricket Ground, Hove, which will incorporate these major changes.
For more information, visit www.russellnew.com