Charity Sector Audit

The reporting, audit and filing requirements that apply to your organisation depend on how it is constituted, not just how big it is. Our charity sector team gives trustees straight answers on what scrutiny the law requires, then delivers it efficiently — with fund accounting, Charity Commission compliance and the new SORP 2026 framework handled as part of the audit, not as afterthoughts.

Audit Rules Differ by Charity Structure

Charitable companies are subject to both company law and charity law: they file at Companies House and with the Charity Commission, and must prepare accruals accounts under the Charities SORP. Charitable incorporated organisations (CIOs) are regulated solely by the Charity Commission — every CIO must file accounts with the Commission regardless of income. Unincorporated trusts and associations follow the Charities Act scrutiny regime, with simpler receipts-and-payments accounting available to smaller non-company charities. Exempt charities (such as many academy trusts and universities) answer to a principal regulator instead of the Commission, with their own audit frameworks. Community interest companies (CICs) are not charities at all — they follow normal company audit thresholds and file an annual CIC report with the CIC Regulator.

Getting the framework right matters: it determines whether you need an audit or an independent examination, which accounts format is lawful, and who you file with. We confirm this for you at the outset — in writing.

Audit or Independent Examination?

In England and Wales a statutory audit is currently required where gross income exceeds £1 million, or where gross assets exceed £3.26 million and income exceeds £250,000. Charities with income above £25,000 need at least an independent examination, and above £250,000 the examiner must hold a professional qualification.

Announced changes intended to apply for financial years beginning on or after 1 October 2026 raise these thresholds substantially: audit at £1.5 million income (or £5 million assets with £500,000 income), independent examination from £40,000, and the qualified examiner requirement from £500,000. Many mid-sized charities will be able to step down from audit to examination — but funders, banks and governing documents often still demand an audit, so the decision deserves proper analysis rather than a default.

Fund Accounting and Restricted Funds

Fund accounting is where charity audits are won or lost. We test that restricted, unrestricted, designated and endowment funds are correctly identified and tracked, that restricted income has been spent in line with donor conditions, and that the statement of financial activities (SOFA) presents fund movements accurately. Where funds are in deficit or restricted income has been misapplied, we help trustees understand the position and put it right — before it becomes a reportable matter.

Trustees' Annual Report and Charity Commission Compliance

Your trustees' annual report must explain your charity's purposes, activities and public benefit, and is reviewed as part of the audit for consistency with the accounts. We also keep trustees on the right side of Charity Commission expectations more broadly: the annual return, serious incident reporting, related party transactions and trustee payments disclosures, and reserves policy reporting. Auditors and independent examiners have a statutory duty to report certain matters to the Commission — we make sure nothing on that list comes as a surprise.

Preparing for SORP 2026

The new Charities SORP, published on 31 October 2025, applies for accounting periods beginning on or after 1 January 2026 and introduces three reporting tiers: Tier 1 up to £500,000 income, Tier 2 from £500,000 to £15 million, and Tier 3 above £15 million. It also aligns charity reporting with the updated FRS 102 — bringing most operating leases onto the balance sheet and changing income recognition. We run SORP 2026 impact assessments as part of audit planning so your first set of new-format accounts is right first time.

Charity VAT and Gift Aid

Because our charity auditors work alongside our VAT and tax specialists, sector audits routinely surface savings: VAT exemption and zero-rating claims, partial exemption optimisation, retail gift aid schemes for charity shops, and gift aid claim accuracy. Assurance and advice from one team, one audit visit.

What You Get With Acumon

• Charitable companies, CIOs, charitable trusts, exempt charities and CICs
• Statutory audits and independent examinations under the Charities Act
• Fund accounting: restricted, unrestricted, designated and endowment funds
• Trustees' annual report review and Charity Commission filing support
• SORP 2026 tier assessment and transition planning
• Integrated charity VAT and gift aid advice
• Hybrid remote/on-site delivery to minimise disruption

Why Acumon for Charity Sector Audit?

• ICAEW and FRC-regulated audit firm with dedicated charity sector experience
• Full-service West London firm with 90+ UK-based staff
• System expertise: Microsoft Dynamics, Sage Line 50 and 200, Xero
• Integrated charity VAT and tax advisory alongside audit
• Only £37k short of the top 100 in the Accountancy Age 50+50 list for 2024

Get a Fixed-Fee Quote

Tell us what you need and we'll come back within one business day with a clear scope and a fixed price — no hourly-rate surprises. Call 020 8567 3451 or use the form and we'll be in touch.