What will the examiner or auditor ask us for?

England and Wales: This page sets out the position in full. Scotland: covered, with an additional duty — the examiner’s or auditor’s report must now be sent to the regulator alongside the accounts, and Scotland has no statutory requirement for that report to be in writing, though it is recommended in practice. Northern Ireland: the same position — no material difference was found in what the file itself needs to contain.

One file for an examination or an audit

The treasurer builds one file, whether the charity faces an independent examination or an audit. Which one is settled when you determine your external scrutiny requirement. What goes in it differs with the route. The kinds of document do not. Nor does the standard of cross-referencing. That holds whether the trustees appointed an independent examiner or a registered auditor.

If your charity needs an audit, not an examination, read each item below as for the auditor. The list itself does not change. The file is the same in England and Wales, Scotland and Northern Ireland. Scotland adds a duty once the work is done: the examiner’s or auditor’s report now goes to OSCR with the accounts.

This page assumes the draft accounts are ready: receipts and payments accounts, or accruals accounts with their notes to the accounts. It also assumes the trustees’ report is drafted (see draft the narrative sections of your report).

What goes in the file?

The file that answers questions before they are asked holds:

• the draft accounts and the draft trustees’ annual report
• the trial balance the accounts are drawn from
• bank reconciliations for every account the charity holds
• the analysis by fund — unrestricted, restricted and endowment
• the related party register and the trustees’ own declarations
• the lease register, where the charity has one
• the going concern minute
• the minutes that approve the budget and any other significant judgement made in the year

Nothing here is unusual. It is the working evidence behind figures already in the accounts. The file puts it all in one place, not spread across the year.

The examiner works to a fixed, numbered set of binding Directions. These are rules with legal force, not mere guidance. The quickest way to build the file is around what those Directions ask the examiner to check.

Can AGM minutes stand in for the trustees’ annual report?

No. The trustees’ annual report is a distinct statutory document. AGM minutes or a chair’s informal report cannot stand in for it. The Charity Commission’s own checks keep finding this problem. They find it even in the smallest charities, and even after those charities have had the chance to put it right.

For a charity preparing accruals accounts, the SORP sets the report’s content by tier. At every tier it requires reference details that include, among other things, names of all those who were trustees on the date the report was approved, or who served as a trustee in the reporting period (para 1.55) and holding trustee names — subject to safety exemptions. An AGM minute or a chair’s own remarks was never built to hold that kind of content.

A missing report, or the wrong document in its place, is not only a filing gap. It is the scrutineer’s problem too, because the examiner or auditor must compare the report against the accounts.

What the regulator’s own checks found

The Charity Commission’s checks found that the accounts are where charities fall short most often. At every income level it sampled, compliance with the accounts fell well behind compliance with the trustees’ annual report or the scrutiny report. At the smallest band it reviewed, 37% of accounts met the external scrutiny benchmark. That rose to 76% at the largest band sampled.

A sharper finding was about related party disclosure. At the smallest band sampled, only 55% of accruals accounts fully disclosed related party transactions. The great majority of the accounts that failed had already been checked by an examiner or auditor. None of those reviewers had reported the gap to the regulator.

Keep the related party register up to date. Hand it over as part of this file. Do not rebuild it in a rush. That keeps the charity from being one of those figures.

The register has to reach back in time as well. The SORP requires a transaction with a former related party to be disclosed, where it relates to the time they were one. It requires outstanding balances with related parties at the reporting date to be disclosed too.

Should we tell the examiner or auditor about a known problem?

Yes: tell them before they find it. The examiner or auditor must report certain matters — matters of material significance — to the regulator, whether or not the trustees raise them first. The regulator’s own stated stance for the examiner is “when in doubt, report it.”

A trustee who hopes a problem will not be noticed is not managing risk. The charity could have explained the matter on its own terms. Instead, the regulator hears about it from someone else, on the scrutineer’s terms.

Once the examination or audit is done, the next step is to approve and sign the accounts.

Common mistake: handing over accounts that do not tie to the trial balance

Late changes get made to the accounts and are not posted back to the records they come from. The examiner or auditor is directed to check that the accounts are consistent with the accounting records. Every hour spent reconciling the two is an hour that gets charged.

Common mistake: submitting AGM minutes or a chair’s report instead of a trustees’ annual report

Trustees do not always realise the report is a distinct statutory document. It has its own required content. It is not a summary in whatever form comes to hand.

The regulator has found this in a meaningful share of the smallest charities, even after giving them the chance to put it right. The scrutineer must compare the report against the accounts, so a missing report becomes their problem too.

Common mistake: not warning the scrutineer about a known problem

Trustees hope the problem will not be noticed. The examiner or auditor must report certain matters to the regulator, whether or not the trustees raise them. The guidance’s own default stance is to report when in doubt. Hiding a problem turns an issue the charity could handle into one for the regulator.

Worked example

Tollgate Youth CIO builds its first scrutiny file after appointing its independent examiner. The treasurer does not send over a folder of papers in whatever order they were made. Instead, the treasurer builds the file so each figure in the draft accounts has its evidence right behind it.

Behind the figures sit the trial balance, the one bank account’s reconciliation, and the small fund analysis. That analysis splits income between unrestricted funds and one restricted grant.

The related party register sits there too, with the minute of the board’s approval of the annual budget. The register is empty this year, but it is present and signed, not absent. The examiner’s questions, when they come, are about substance, not about finding a missing document.