Charities Act 2006 – Consultation on implementation of accounting and reporting changes

The Charities Act 2006 is now on the statute books and later this year will see many of the accountancy and reporting provisions implemented.  The Office of the Third Sector has launched a sector consultation to help decide how changes to the accounting and reporting framework will be implemented and supported by regulations.  Key changes include:

• harmonising the audit and independent examination requirements for company and non-company charities, by applying the Charities Act audit or examination requirements to small company charities;
• providing a statutory framework for the preparation and audit of group accounts. Group accounts are already recommended by the charity SORP, and are generally accepted practice in the sector;
• a clearer whistle blowing duty and protection for auditors and independent examiners brought into primary legislation;
• use of Trustees’ Annual Reports to report on charities’ public benefit;
• updated account requirements for common investment fund charities.

The consultation documents and partial regulatory impact assessments can be downloaded from the Office of the Third Sector’s website.

Public Benefit

It is recognised that some consultees may wish to limit their response to the proposal that charities report their public benefit through the Trustees’ Annual Report. An extract of the full consultation document and draft Regulations has therefore been prepared focusing just on the proposed public benefit reporting requirement.

• Public Benefit Reporting extract (PDF 54kb)
• Public Benefit Reporting extract (HTML)

The Commission’s own Consultation on Draft Public Benefit Guidance closed on 6 June. A copy of the consultation document which includes the draft public benefit guidance is on our website.