Audit red tape could hit charity funds
Increased regulation in charity audits could force firms to give up the work due to the low risk-to-reward ratio, say auditors.
Increased regulation in charity audits could force firms to give up the work due to the low risk-to-reward ratio, say auditors.
Rules introduced by the Charities Commission last year mean auditors now have more duties to report to the Commission. But, auditors are concerned the rise in red tape will mean audit firms are less likely to do the work.
Gerry Acher, a senior UK partner at KPMG, said: ‘Implications for auditors on charity accounts get more onerous as charity regulation gets more developed.’
Many leading auditing firms take on charity audits more as a ‘duty to society’ than as a cash-generating exercise. Martyn Jones, audit partner at Deloitte & Touche, added: ‘It seems we’re in an era where regulators are trying to offload. The organisations that’ll miss out will be the charities.’
Another factor likely to compound the problem is the rise in the audit threshold. Many accountancy practices have not renewed their audit licences because of the fall in the number of companies needing an audit. Acher said: ‘I’m worried about the smaller charities. There will be fewer people in the marketplace and small charities will have nowhere to go to get the expertise they need.’
A Charity Commission spokesman said: ‘Proposals set out in the [Auditing Practices Board] draft clarify a charity auditors’ responsibilities‘ rather than requiring significant additional responsibilities of the auditor.’
Links
Commission urges charities to comply
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceFollowing a profitability review, Deloitte has decided to scale back its UK deals business due to lower returns. This strategic shift could lead to jo...
View articleUK-based Dow Schofield Watts (DSW), a mid-market professional services network, announced the creation of a new division called DSW Principal Partners...
View articleEY has been undergoing significant cost-cutting measures and streamlining its operations since the abandonment of Project Everest. The firm has made t...
View articleTransitioning from an accounting firm to a consultancy model is only one part of the puzzle. The next, equally vital piece is making the market aware ...
View articleThis framework, while providing a top-line view, underscores the importance of strategic vision, operational excellence, and the spirit of continuous ...
View articleLooking ahead, the Big 4 firms face a challenging year, with ongoing cost-of-living concerns, slow economic growth, rising geopolitical tensions, and ...
View articleLast month it was reported that Deloitte would be cutting approximately 1,200 jobs in the United States, making it the latest of the Big Four accounti...
View articleAfter years of deliberations and millions of dollars spent, EY has officially pulled the plug on its greatly anticipated break-up plan Read More...
View article