This blog is specifically for charities in Scotland.
If your charity is in England and Wales click here and for charities in Northern Ireland click here.
Understanding OSCR’s Requirements
Charities in Scotland are governed by the Office of the Scottish Charity Regulator (OSCR), which sets out specific requirements for financial reporting. Whether your charity needs an Independent Examination or a more thorough Audit depends on its income, assets, and governing documents. Here’s a comprehensive guide to help trustees navigate these thresholds and legal obligations.
Independent Examination or Audit: What’s the difference?
When Is an Independent Examination Required?
All Scottish charities must have their accounts independently examined or audited. There are no ‘lower’ income threshold (this is different to charities in England and Wales).
Independent Examination is required for:
The Independent Examiner must:
When Is an Audit Required?
An audit is mandatory for Scottish charities if:
1. Exceeds the statutory thresholds, which are:
2. Your governing document or funder agreements mandate an audit, regardless of income levels. Always check your governing document.
3. Funder agreements stipulate an audit is required – although check they really mean an audit and not just an Independent Examination (many people use the term audit for an external accountant looking at the figures).
4. Charity Commission intervention: The Commission may require an audit if there are regulatory concerns.
In these cases, the audit must be conducted by a registered auditor who is regulated under the Companies Act 2006.
Legal Framework
The reporting requirements for Scottish charities are set out under:
1. The Charities and Trustee Investment (Scotland) Act 2005:
2. The Charities Accounts (Scotland) Regulations 2006 (as amended):
3. OSCR Guidance:
Additional Considerations
Practical Tips for Trustees
Conclusion
Complying with OSCR’s financial scrutiny requirements ensures transparency, protects your charity’s reputation, and maintains donor trust. Understanding whether your charity needs an Independent Examination or Audit is a key part of fulfilling your trustee responsibilities.
With the right support, you can navigate these requirements confidently and focus on achieving your charity’s goals.
For tailored advice and services for charities, reach out to us! We’re here to help you navigate financial scrutiny and focus on achieving your charitable goals.