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Posted by:

Adaku Okereke

Article read time:

1 minutes

Adaku Okereke is a seasoned Audit Senior Manager with extensive experience across the dynamic landscape of not-for-profit organisations. She manages an allocated portfolio of audit assignments within the not‑for‑profit team. She offers pragmatic solutions by tackling challenging issues directly and seeking practical outcomes. Her audit assistance and expertise are focused on making a meaningful and lasting impact for her clients.

Accounting and reporting Governance, legal and compliance

9 April 2026, 10:21

Five mistakes charity keep making under the SORP - and how to avoid them

While the updated Charities SORP introduces new expectations, many of the same reporting challenges continue to appear in practice. Addressing these recurring issues is key to improving reporting quality.

Across the sector, there is a tendency to treat financial reporting as a year-end task. This often results in the same problems arising repeatedly, despite clear guidance. The issue is not complexity alone, but how organisations approach the process.

One of the most persistent issues is fund classification. Distinguishing between restricted and unrestricted funds is fundamental, yet errors remain common. This can distort how stakeholders interpret financial health and limit effective decision-making.
Related party disclosures are another area of concern. Transparency in this area is critical to governance, yet disclosures are sometimes incomplete or inconsistent. Given the level of scrutiny on charity governance, this creates unnecessary risk.
Narrative reporting is also frequently underestimated. Many organisations leave it until the final stages of the reporting process, which can result in generic or superficial disclosures. Capturing relevant information throughout the year leads to much stronger outcomes.
Income recognition continues to present challenges, particularly where grants and contracts include conditions. Misinterpreting these can lead to income being recognised at the wrong time, affecting both reported performance and stakeholder understanding.
Accounting policies are sometimes overlooked. Policies that are not updated in line with current guidance can lead to inconsistencies and confusion. Regular review is essential to ensure alignment with SORP requirements.

What links these issues is not a lack of knowledge, but a lack of process. Organisations that embed reporting into their ongoing operations tend to produce clearer, more reliable outputs.

As expectations continue to increase, the margin for error is narrowing. Stakeholders are looking for transparency, consistency and evidence of good governance.

Key takeaways:

Common reporting issues remain widespread

Many problems stem from process, not technical knowledge

Strong systems improve reporting quality

Proactive preparation reduces risk

This is the second article in a two-part series on the SORP, from Adaku Okerere. Read the first article, on key changes to the Trustees' Annual Report here

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Adaku Okereke

1 minutes

Five mistakes charity keep making under the SORP - and how to avoid them

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