In August, the Charity Commission for England and Wales updated their guidance to trustees on Independent examinations (CC31). The guidance is intended to help trustees understand what an examination is, whether they are entitled to have an examination, who to appoint and how to prepare for it.
This follows on, somewhat belatedly, from the guidance to examiners published in September 2017 (CC32). This set out 13 directions for examiners to follow when undertaking their work.
CC31 should be essential reading for all trustees. There is a common mis-conception amongst trustees that their accounts are being audited rather than subject to an independent examination. This document attempts to remove that confusion by explaining exactly what an independent examination is all about and also contains links to an ICAEW guide explaining the difference between an independent examination and an audit.
The guidance also gives a step by step guide to the characteristics of independence and gives examples of people / roles which would be barriers to independence. It also reminds trustees to review independence and experience on an ongoing basis.
Trustees are also encouraged to prepare for their independent examination by understanding the process the examiner will follow, agree arrangements and timetables for preparing the accounts and the examination, make the relevant documents available, make and agree any recommended changes and finally file the accounts and trustees report.
As examiners, it is important for us to inform our trustee clients as to the procedures and processes we undertake, but pointing them towards this guidance will allow them to get a rounded overview of the process and what the charity can expect from us.
It may even stop them incorrectly referring to us at auditors!