APB issues Revised Guidance on the Audit of Charities

APB PN 100 - 22 December 2008

The Auditing Practices Board (APB) has published a revision of Practice Note (PN) 11: ‘The Audit of Charities in the United Kingdom’. The revised PN 11 was issued for public consultation in July 2008.

The previous version of PN 11 was issued in 2002 and supplemented by Bulletin 2005/1: ‘Audit risk and fraud – supplementary guidance for auditors of charities’.

The update to PN 11 reflects:

• the replacement of Statements of Auditing Standards by ISAs (UK and Ireland);
• changes to the Charities Act 1993 (which apply to charities in England and Wales) as a result of the implementation of the Charities Act 2006 on 1 April 2008;
• changes to the legal and regulatory arrangements for charities in Scotland, including the establishment of the Office of the Scottish Charity Regulator (OSCR) which apply to accounting periods commencing on or after 1 April 2006;
• changes to the guidance on the Charity Commission’s interpretation of ‘material significance’ in the context of whistleblowing responsibilities.

Illustrative auditor’s reports for charities in both England and Wales and in Scotland were included in the consultation draft of the revision. These will now be included in a supplementary Bulletin to be issued shortly.

Richard Fleck, APB Chairman, said:

“There have been a number of significant changes in law and regulation relating to charities since PN 11 was issued in 2002, and these are reflected in this revision. In particular, guidance is provided on the new regulatory arrangements in Scotland. I hope that auditors of charities will find the guidance included in PN 11 (Revised) to be useful”.

Copies of the revised PN may be downloaded from the Publications (Practice Notes) section of this website. From mid-January 2009, hard copy booklets may be obtained (price £14 each post-free) from FRC Publications, 145 London Road, Kingston upon Thames, Surrey KT2 6SR. Telephone 020 8247 1264