Audit Threshold and Independent Examination

Changes to audit thresholds for charity accounts with year ending on or after 31 March 2015

In its response on 19 February 2015 to a Cabinet Office consultation, the Government has decided to make the following changes:

  • increase the income threshold for audit of charities from £500,000 to £1,000,000;
  • increase the aggregate group income threshold at which parent charities should have group accounts audited from £500,000 to £1,000,000; and
  • increase the preparation threshold for group accounts from £500,000 to £1,000,000.

However, the asset test will be unchanged, so charities with income of £250,000 and assets of £3.26 million or more will still require an audit.

The changes apply to England and Wales only. Different thresholds will continue to apply in Scotland and Northern Ireland for the time being.

The changes will be made by statutory instrument during this Parliament and will take effect on31 March 2015.

This means that charities whose accounting year ends on or after this date will be able to apply the new thresholds in deciding whether to adopt audit or independent examination.

The Government will ask the Charity Commission to consider highlighting the differing assurance aspects between an audit and an Independent Examination.

Click here to view the report.

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