Independent examination of charity accounts
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If your charity's gross income is over £25,000, the law requires external scrutiny of your accounts. For most charities that means an independent examination, not a full audit. It is a lighter, narrower check, and it costs considerably less.
And here is the part that catches trustees out.
Once your income passes £250,000, you cannot simply appoint a friendly accountant, or a helpful retired treasurer, or a trustee's brother-in-law who is "good with numbers." Your examiner must be a member of one of the accountancy bodies named in the Charities Act 2011.
The Association of International Accountants is on that list. We are AIA members in practice, we hold a practising certificate, and we can act.
Always check GOV.UK for the latest.
When does a charity need an independent examination?
It comes down to your gross income, and in one case your gross assets too.
And every one of these figures changes on 30 September 2026
Read both columns. The right-hand one is the one that will apply to your next set of accounts.
The changes apply to accounting years ending on or after 30 September 2026.
| Requirement | Now | From 30 September 2026 |
|---|---|---|
| Accounts must be independently examined | Income over £25,000 | Income over £40,000 |
| Examiner must be professionally qualified (on the statutory list) | Income over £250,000 | Income over £500,000 |
| Non-company charities may use receipts and payments accounts | Income under £250,000 | Income under £500,000 |
| Accounts must be audited | Income over £1,000,000, or gross assets over £3,260,000 | Income over £1,500,000, or gross assets over £5,000,000 |
| Group accounts must be audited | Group income £1,000,000 | Group income £1,500,000 |
Source: Charity Commission, Changes to charity accounting and reporting. The Commission's own wording is that these changes are "expected to come into effect" on 30 September 2026. We will update this page if that moves.
Gross assets means fixed assets plus current assets. It is the test people forget, and it is the one that quietly pushes a mid-sized charity into audit territory.
The change that matters most, and almost nobody has noticed it:
The audit threshold rises from £1 million to £1.5 million. So a charity with income between £1m and £1.5m, which today must be audited, will be able to have an independent examination instead. That is a considerable saving.
But you cannot simply keep your auditor and pay them less. Above £500,000, the examiner must be a member of one of the accountancy bodies named in the Charities Act. Many audit firms will not want examination work at examination prices.
If you are in that band, this is worth a conversation before your year end, not after it.
Two things can override all of this, and they catch people every year.
- Your governing document may require an audit, even where the law would let you have an examination. Older constitutions often do, because they were written when the rules were different. (This can usually be changed. It is worth checking before you pay for an audit you never needed.)
- A funder may require an audit as a condition of a grant.
Read your governing document before you assume. We will read it with you.
Who can be an independent examiner?
Two tests. Both must be met.
1. They must be independent
The examiner cannot be a trustee. They cannot be your employee or your bookkeeper, sit on your finance sub-committee, be a major donor, or have a close relationship with the trustees.
Independence is not the same as having no connection. A supporter of the charity can examine it. Someone who helps run it cannot.
2. Above a certain income, they must be on the statutory list
This is the rule most trustees do not know exists.
Today that threshold is £250,000. From 30 September 2026 it rises to £500,000.
Once gross income exceeds it, the Charities Act requires the examiner to be a member of one of a named list of accountancy bodies, and to be permitted by that body to act.
The Association of International Accountants is one of them, alongside ICAEW, ICAS, ACCA, CIMA, CIPFA, AAT, ACIE and others.
👉 See the Charity Commission's own list of eligible bodies
Below that threshold there is no legal requirement to use a listed body. The Commission still recommends it if you prepare accruals accounts, because the examiner needs to understand the Charities SORP. Plenty of small charities appoint someone unqualified and find out the hard way that SORP is not intuitive.
And SORP itself changed on 1 January 2026. The new Charities SORP 2026 brings in a new income recognition model and, more painfully, puts leases on the balance sheet. If your charity rents its premises, that is not a technicality. We have written up what changes and when.
Two doors, and you can only walk through one
We can be your charity's finance function, or we can be your examiner. Not both. That is the independence rule, and it is absolute: an examiner cannot keep the charity's books or be involved in running it.
So pick the one you actually need.
Door 1: we run your charity's finances
Bookkeeping, payroll, VAT where it applies, management accounts for your trustee meetings, and your annual report and accounts prepared to the Charities SORP.
This is the one most small charities genuinely need. Charity bookkeeping is not ordinary bookkeeping. Restricted and unrestricted funds have to be tracked separately, grant income has to be recognised in the right period, and donated goods and volunteer time have their own treatment. Get the fund accounting wrong during the year and no amount of cleverness at year end will fix it.
Most treasurers we meet are volunteers doing their best with a spreadsheet, and they are the ones carrying the risk personally.
If we do this, someone else examines your accounts. We will help you find an examiner who is properly qualified, and we will hand them a clean file, which usually makes their fee lower.
Door 2: we are your independent examiner
You keep your finances in-house, or with someone else, and we provide the statutory scrutiny.
We can still help you prepare the annual report and accounts and then examine them. The Commission permits this explicitly, provided we are not maintaining your records or running the charity. In practice it is a sensible arrangement, because the person examining already understands the numbers.
What we cannot do is keep your books all year and then sign off our own work. Nobody can, and any firm that offers to should worry you.
We will tell you which door a piece of work falls behind before you engage us, not after. If you are not sure which you need, that is a ten-minute conversation and it is free.
What actually happens in an independent examination
It is a review, not an audit, and the difference matters.
An auditor forms an opinion on whether the accounts give a "true and fair view." An examiner does not. An examiner checks specific things and reports on whether there is reason to believe something is wrong.
We will:
- Review your accounting records and compare them against the accounts
- Check the accounts agree with the records
- Look at unusual items and disclosures
- Check compliance with the Charities SORP, where you prepare accruals accounts
- Report to your trustees
Because it is narrower than an audit, it takes less time and costs less. That is the whole point of it existing.
What we are obliged to report
We should be clear about this, because it is a duty to the regulator, not to you.
An examiner must report certain matters directly to the Charity Commission, regardless of what the trustees would prefer. These include dishonesty and fraud, money laundering, and a failure to manage significant conflicts of interest.
We are telling you this up front because a good examiner tells you the rules before they start, not after they find something. In practice, for a well-run charity, it never arises.
Your deadlines
- 10 months from your financial year end, to file the trustees' annual report, accounts and examiner's report with the Charity Commission
- 9 months from year end, if you are a charitable company, to file at Companies House as well
Do not leave finding an examiner until the accounts are due. The Commission says so itself, and it is right. Appointing an examiner in month nine is how charities end up filing late.
Why a Manchester charity might use us
Most small practices cannot do this work at all, because they are not on the Charities Act list. It is not a question of competence. It is a question of which letters follow their name.
We can, and we can prove it in one click.
We work with Manchester's charities, community groups, mosques, churches and CICs. The sector here is enormous and it is badly served, because the firms that hold the qualification tend to chase larger clients, and the firms that want the work often cannot legally take it.
Fixed fee, agreed before we start. Charities have budgets that are somebody else's money, and an open-ended bill is not acceptable in that context.
Independent examination: frequently asked questions
When does a charity need an independent examination?+
When its gross income is over £25,000. Below that, most charities need no external scrutiny at all. Above £1 million, or above £250,000 with gross assets over £3.26 million, an audit is required instead and you cannot choose an examination.
Who can carry out an independent examination of charity accounts?+
The examiner must be independent, which rules out trustees, employees, bookkeepers and anyone closely connected to the charity. If gross income is over £250,000, the examiner must also be a member of one of the accountancy bodies named in the Charities Act 2011. The Association of International Accountants is on that list, so we are eligible to act.
What is the difference between an audit and an independent examination?+
An audit gives an opinion on whether the accounts are true and fair. An independent examination does not. It is a narrower check: the examiner compares the accounts against the records, looks at unusual items, and reports if there is reason to believe something is wrong. It takes less work and therefore costs less.
Can our accountant also be our independent examiner?+
Not if they keep your books or are involved in running the charity. They can, however, help you prepare the annual report and accounts and then examine them, which the Charity Commission permits explicitly. So we can either be your finance function or your examiner, and we will tell you which side of the line a piece of work falls on before you engage us.
Do you do bookkeeping for charities?+
Yes, and charity bookkeeping is a specialism rather than ordinary bookkeeping. Restricted and unrestricted funds must be tracked separately, grant income has to be recognised in the right period, and donated goods and volunteer time have their own treatment under the Charities SORP. If the fund accounting goes wrong during the year, it cannot be fixed at year end. If we keep your books, an independent examiner elsewhere signs off your accounts, and we will help you find one.
Our treasurer is a volunteer and is struggling. Is that normal?+
Very. Most small charities are run by people giving their time, and charity fund accounting defeats a lot of capable people because it is genuinely different from business bookkeeping. It is also the treasurer who carries the personal exposure if it goes wrong, which is not a fair thing to leave sitting on a volunteer.
Our governing document says we must have an audit. Do we?+
Then yes, for now. But governing documents written years ago often require an audit that the law no longer demands. It can usually be amended. It is worth checking, because an unnecessary audit is an expensive habit.
How much does an independent examination cost?+
Less than an audit, and we agree the fee before we start. It depends on your income, whether you prepare receipts and payments or accruals accounts, and the state of your records. Well-kept records make it cheap. That is not a sales line, it is just true.
When do we have to file?+
Within 10 months of your financial year end, to the Charity Commission. Charitable companies must also file at Companies House within 9 months.
We are a small mosque / community group / CIC. Does this apply to us?+
If you are a registered charity with income over £25,000, yes. CICs are not charities and have their own regime, so speak to us and we will tell you which rules you are actually under. It is a common and understandable confusion.
Related and next steps
Need an examiner who is allowed to act?
We are on the Charities Act list, so we can examine your accounts where a qualified examiner is required. Tell us your income and how you keep your books, and we will tell you exactly what you need.