A complete guide to understanding independent examination for UK charities, including how it works, when you need one, and why it matters for your organisation.
What is a charity independent examination? Simply put, it is a statutory financial review that many UK charities must have carried out each year. Think of it as a lighter-touch alternative to a full audit. It provides assurance that your charity's accounts are materially correct without the extensive testing procedures of an audit.
An independent examination is carried out by an independent person. Often this is a qualified accountant or someone with relevant experience. They review your charity's financial records and accounts. Unlike an auditor, an independent examiner does not test systems and controls in the same depth, which is why it is generally cheaper than an audit.
The examiner produces a written report that goes to your trustees and gets filed alongside your annual accounts with the relevant charity regulator. This could be either the Charity Commission for England and Wales, OSCR in Scotland, or CCNI for Northern Ireland.
During an independent examination, your appointed examiner will:
The examiner will ask questions, request evidence, and may identify areas where they'd like additional explanation. At the end, they'll provide either a clean report (everything looks good) or raise any concerns they've found.
It's important to understand what independent examination doesn't cover:
| Aspect | Independent Examination | Statutory Audit |
|---|---|---|
| Level of assurance | Limited reasonable assurance | High reasonable assurance |
| Testing procedures | Sample-based testing | Extensive testing of controls and transactions |
| Typical cost | £300 - £2,500 | £2,000 - £10,000+ |
| Time required | Fewer hours | Significantly more hours |
| Fraud detection | Limited detection | Better detection, but not guaranteed |
| Legal requirement | Charities £25k-£1m income | Charities over £1m income (or other triggers) |
In the UK, whether you need an independent examination or a full audit depends on your charity's annual income:
Unlike audits, independent examinations don't necessarily require a qualified accountant. However, the person must be independent and competent. Here's what you need to know:
Independent examination matters for several important reasons:
Our specialist charity accountants have years of experience carrying out independent examinations for charities across the UK. We can help ensure your examination runs smoothly and meets all regulatory requirements.