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Covid-19 Guidance for Independent Examiners

Charity regulators in the UK have issued supplementary guidance for independent examiners to highlight areas where current restrictions (or any other national emergency) may create challenges or pose difficulties for when an independent examination of a charity’s accounts is being performed.  The following is an Executive Summary of the issues to be aware of:

“This guidance is to assist Independent Examiners with some of the considerations that may arise due to the impact of the COVID-19 virus.  It has been issued jointly by the UK Charity Regulators.

The guidance considers the following areas:

  • Impact of COVID-19 restrictions on access to records: Examiners must consider how they will access records which will allow them to properly undertake their examination. They may need to rely on electronic means and this may take additional time.  Examiners will need to consider the implications when they accept new engagements in this period and how they will access the required information;
  • Access to those in management and control of the charity: In the absence of physical meetings with those in management and control, examiners will need to consider how they can access both trustees and key personnel within the charity to obtain the explanations and information needed to complete the examination. Greater reliance may need to be placed on verbal or written assurances received.  The examiner should ensure that these conversations or assurances are fully documented;
  • Risk factors: COVID-19 may have a number of implications on the operations of the charity and the accounts which are being considered. The examiner will need to pay close attention to the following areas:
    • Any change in spending to assist with operational difficulties posed by COVID-19 and how this fits with the charity’s purposes;
    • Restricted funds being used incorrectly;
    • Difficulty in maintaining financial controls due to the circumstances;
    • The risk of misstatement in the accounts if a charity has not allowed for all financial obligations;
    • Correct inclusion of COVID-19 related events subsequent to the year-end;
    • Going concern issues due to the impact of COVID-19 on the charity’s finances.
  • Implications for the Examiner’s Report: Examiners will need to consider the impact on the conduct of their examination and on the charity and decide whether there are any matters that require reporting in their Independent Examiner’s report; and
  • Sign off and filing of accounts: Examiners will need to consider whether they are able to complete their examination at this time.”

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