Accounting and reporting

CFG Consultation Response for Matters of Material Significance

CFG has responded to the Charity Commission, OSCR and CCNI consultation on reporting matters of material significance.

Our recommendations are summarised below, or you can view the full consultation response.

• We welcome this review into matters of material significance, and believe that it should have the principles of cost, pragmatism and maintaining a strong relationship between auditors and independent examiners at their heart.

• While we understand the Charity Commissions desire to maintain public trust and confidence, we are concerned that most of the recommendations do not take into account the role and expertise of independent examiners, and believe that matters of material significance need to be set with their role in mind.

• We have concerns that auditors are increasingly being asked to police the charity sector. Greater support and training for charities from the Charity Commission would help to increase standards of compliance.

• There is a significant risk that the increasing reporting requirements for auditors would be detrimental to building a more financially resilient sector. Auditors would take a step back from working with their clients for fear of the regulatory consequences greatly reducing the avenues through which charities, especially small charities, can receive support.

• The potential additional reporting requirements could place a disproportionate burden on independent examiners and the charities that use them. These recommendations do not account for the ability and responsibility of an independent examiner, and are instead solely focused on auditor’s capacity.

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