Wylie & Bisset, Accountants and Business Advisers, has called for the charity audit threshold in Scotland to be doubled and brought into line with England and Wales.
Increases to the company law audit threshold have caused a fall in the number of accountancy firms being registered to undertake audit work, a trend that has led to fewer auditors available to take on audits.
The Institute of Chartered Accountants of Scotland (ICAS) has now called on the Scottish government to remove mandatory audit requirements from smaller charities ‘as a matter of urgency’.
ICAS called on the government to raise the charity audit threshold from those with an income of £500,000 a year, warning that at the current threshold there is an increasing risk that some Scottish charities may not be able to secure the services of an auditor for their statutory audit.
Rory McCall, associate director, audit at Wylie & Bisset, has witnessed first hand the challenge charities face when seeking to commission auditors.
“There are more and more charities breaching the audit threshold naturally as their income levels rise over time due to inflationary factors, Covid-related funding and other causes, and it is now time for the government to consider raising the audit threshold,” he said.
“At £1 million, the audit threshold in England and Wales is double what it is in Scotland, and I don’t see why Scotland should deviate significantly from that threshold. Given the number of charities in Scotland struggling to find auditors, it is now time to consider increasing the threshold and bringing it into line with what we see in England and Wales.”
Mr McCall’s advice to Scottish charities operating within the audit regime is to monitor income levels throughout the year to measure any risk of breaching the audit threshold and plan ahead for that scenario.
“It’s much easier for a charity to find an auditor if it has plenty of advance warning rather than passing the year end before realising that it has breached the audit threshold, so planning ahead is key,” he said.
For further information please contact Rory McCall on 0141 566 7000.
Issued on behalf of Wylie & Bisset by Liquorice Media tel 0141 332 4935 www.liquorice-media.com
Date: 31 Oct23