How do we appoint a charity auditor?

England and Wales: This page sets out the position in full. Scotland: covered, with a different threshold and a different basis — the figure changed too, and it runs from the start of the financial year rather than the end, which produces real collision cases against the English test. Northern Ireland: covered, with a lower threshold than either — and, distinctively, no assets-based test at all.

When is a charity auditor needed in England and Wales?

In England and Wales the trustees must have the accounts audited when the charity meets either of two tests in the Charities Act 2011. Scotland and Northern Ireland set their own tests. Each nation also has its own regulator: the Charity Commission, OSCR and the Charity Commission for Northern Ireland. The table shows the England and Wales tests for a statutory audit.

The asset figure never triggers an audit on its own. Whether the charity needs an audit at all, rather than an independent examination, is a separate question. It is settled at Does my charity need an audit, an independent examination, or neither?

The assets test and its income condition

The assets test only bites together with a gross income condition. Under it, a charity’s accounts must be audited only where both limbs are met in the same year. The asset limb is gross assets above £3,260,000 for financial years ending before 30 September 2026; £5,000,000 for financial years ending on or after 30 September 2026. The income limb is gross income above £250,000 for financial years ending before 30 September 2026; £500,000 for financial years ending on or after 30 September 2026.

This is the most often mis-stated fact in the whole hub. Almost every published summary of the 2026 changes gets it wrong or leaves it out. Why the income condition moves by itself is explained in determine your external scrutiny requirement.

A charity well above the old assets figure but below the income figure needs no audit under this limb at all. Do not rely on, or copy, a summary table that shows the two 2026 audit figures without this condition.

The assets test is measured before liabilities are deducted, at the year end.

The new lease rules come from FRS 102, and the current SORP applies them. Under them, many charities bring right-of-use assets onto the balance sheet for the first time. That can push gross assets over the line for a charity that was well below it before. The government gave this as one reason for raising the threshold.

Which statute governs a charitable company’s audit?

A charitable company has two possible audit regimes, and the Companies Act 2006 is tested first. Only one applies at a time. They apply in turn, not together. If the company’s accounts must be audited under Part 16 of the Companies Act 2006, that is the only statutory scrutiny that applies.

The Charities Act audit rules then switch off entirely, including the regulator’s own power to order an audit. Only if the company is exempt from a Companies Act audit do the Charities Act figures switch back on and decide the question.

This catches people out in the same way again and again. A charitable company can be well within “small” under company law and claim the small-companies audit exemption at Companies House (see file with Companies House). It can still need a full statutory audit for the charity regulator. That is because its income or assets cross the quite different charity thresholds.

Its Companies House balance sheet then carries an audit-exemption statement. Yet the same set of accounts carries a full Charities Act audit report for the regulator. That looks like a contradiction. It is correct.

Scotland: a different figure, on a different basis

Scotland’s own audit threshold is £500,000 for financial years beginning before 1 January 2026; £1,000,000 for financial years beginning on or after 1 January 2026. It also runs on a different basis from the English test. Scotland’s threshold applies to financial years beginning on or after the change date. The England and Wales test applies to years ending on or after its own change date.

So a Scottish charity and an English charity with the same year-end dates can land on different rule sets. It depends on when each one’s year began. One basis runs off the start of the year and the other off its end. It is a real collision case, not an edge case to wave away; the year-by-year table is in set your financial year end.

Northern Ireland: the lowest threshold, and no assets test at all

Northern Ireland’s audit threshold is £500,000. It is unchanged since 2008, and now the lowest of the three UK nations by a wide margin. Note the wording with care: the statute says a charity’s income must exceed that figure, not “£500,000 or more”. A Northern Ireland charity with income of exactly that figure does not need an audit, where the equivalent Scottish wording would catch it.

Northern Ireland also has no assets-based audit trigger at all. Applying the England and Wales or Scottish assets test to a Northern Ireland charity is the wrong test.

The one place an assets figure appears in the Northern Ireland law is for group accounts. That provision cannot operate, because the sum it depends on has never been prescribed.

Audit fees and choosing a charity auditor

No published fee scale exists for charity audit, any more than it does for independent examination. Rough median fees by income band come from a December 2021 sector survey. They have not been uprated since. They run from a median of around £1,420 at the smallest band surveyed to several times that as income rises.

The range within each band is wide. Quote the medians with their spread, never a single figure. Fees have risen a lot since that survey. Treat the figures as dated evidence of how pricing is shaped, not as current numbers.

In the same survey, more respondents named fee as an important factor in choosing an auditor than named technical competence. Fee-related concerns were also the largest single type of complaint about auditors in the same data. Charity audit needs SORP expertise. Choosing on fee alone is linked with the same complaint pattern the sector’s own data records.

Once the auditor is appointed, the next step is to prepare the scrutiny file the audit will work from.

Common mistake: not knowing which regime the audit is under

Most charities have only one possible regime. A charitable company has two, and only one applies. Which one applies turns on whether the Companies Act requires an audit at all.

Getting this wrong means the audit report cites the wrong statute. That is a benchmark failure in its own right.

Common mistake: selecting on fee alone

Fee is the easiest factor to see and compare. The sector’s own survey data shows it is the factor named most often. It ranks ahead of technical competence.

Charity audit needs SORP expertise that a general practice audit does not. Choosing on fee is linked with the largest single type of complaint the same survey records.

Common mistake: leaving appointment until after the year end

The audit requirement only becomes certain once the year’s figures are known. So it is tempting to leave the appointment until then.

Suppose an auditor has not observed a year-end stock or cash count, or checked opening balances during the year. That auditor may have to issue a modified opinion for lack of evidence. Lack of evidence was the largest single cause of modified opinions in the regulator’s own data.

Worked example

Saltmarsh Trust is a charitable company with a trading subsidiary. It sits below the Companies Act 2006 size limits and claims the small-companies audit exemption at Companies House. Its balance sheet there carries an audit-exemption statement. Its income and assets are still well above the Charities Act 2011 audit thresholds.

So it needs a full statutory audit for the charity regulator, whatever its Companies House filing says. Both things are true about the same set of accounts at the same time. Saltmarsh’s engagement letter names the Charities Act as the statute the audit is carried out under. The auditor, the trustees and the regulator then have no doubt about which regime produced the report.