When Do Charities in Northern Ireland Require an Independent Examination or an Audit?

When Do Charities in Northern Ireland Require an Independent Examination or an Audit?

This blog is specifically for charities in Northern Ireland.

If your charity is in England and Wales click here and for charities in Scotland click here.

Charities in Northern Ireland must comply with the Charity Commission for Northern Ireland (CCNI) regulations, which determine whether a charity needs an Independent Examination or an Audit. These requirements depend on the charity’s gross income, assets, and any stipulations in its governing documents. Here's a detailed guide for charity trustees in Northern Ireland.


Independent Examination or Audit: What’s the difference?

  • Independent Examination: A simpler review of a charity’s financial records by an independent person, providing limited assurance that the accounts are free from obvious errors or issues.
  • Audit: A more detailed scrutiny of the accounts by a registered auditor. It provides a higher level of assurance to stakeholders and an opinion on the True and Fair View of the accounts.


When Is an Independent Examination Required?

All Northern Ireland 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:

  • Non-company charities that prepare Receipts & Payments accounts (i.e income under £250,000);
  • Gross income exceeds £250,000 but does not meet the audit thresholds (see below);
  • Accruals accounts have been prepared, regardless of income levels.

The Independent Examiner must:

  • Be independent of the charity.
  • Be suitably qualified if the charity’s income is over £250,000 (e.g., a member of a recognized professional body like ACCA or ICAS), or if accruals accounts have been prepared, regardless of income levels.


When Is an Audit Required?

An audit is mandatory for Northern Ireland charities if:

  1. Gross income is over £500,000.
  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

Charities in Northern Ireland must adhere to the following legislation:

1. Charities Act (Northern Ireland) 2008:

    • Establishes the statutory thresholds for Independent Examinations and audits.
    • Sets out the responsibility of charity trustees to ensure proper financial oversight.

    2. The Charities (Accounts and Reports) Regulations (Northern Ireland) 2015:

      • Details the requirements for preparing and scrutinizing charity accounts.
      • Defines the thresholds for external scrutiny and reporting obligations.

      3. Charity Commission for Northern Ireland Guidance:


        Additional Considerations

        1. Voluntary Audits:

          • Some charities may opt for an audit even if it’s not legally required, particularly to enhance transparency for donors or stakeholders.

          2. CCNI Directions:

          • CCNI may require an audit in specific circumstances, such as concerns about governance or financial management.

          3. Group Structures:

          • If your charity is part of a group or umbrella organization, the combined financial picture may necessitate an audit.


          Practical Tips for Trustees

          1. Review Your Thresholds: Regularly assess your charity’s income and assets to determine whether an Independent Examination or Audit is required – don't leave it until after the year end as you may need to appoint a new examiner/auditor.
          2. Plan Ahead: Arrange for an Independent Examination or Audit well in advance to meet CCNI deadlines and avoid penalties.
          3. Seek Professional Help: If you’re unsure about your charity’s reporting obligations, consult a qualified accountant or auditor familiar with Northern Ireland charity law.


          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.

          .