Treasurers > Reporting and Accounting > Audit and Independent Examination?

Independent Examination and Audit

All PCCs below the audit threshold (currently £5000,000) may choose to have their financial statements independently examined rather than audited.  Please note that if gross income exceeds £250,000, an independent examiner must qualify by being a member of an approved professional organization (See Section D1 of the Charity Commission's Guide to Independent Examination for a list of approved organizations). A major donor or grant maker may require the financial statements to be audited even though an independent examination might otherwise have been chosen. An audit is a more onerous form of scrutiny and must be carried out by a registered auditor but an auditor can be asked to act as an examiner. 

PCCs who can choose to prepare their financial statements on the R & P basis should normally choose independent examination rather than audit. Thus the majority of PCC's will have their accounts independently examined, rather than audited. (To check what is included in the calculation of  income and expenditure click here.)

An audit is only needed where the gross income exceeds £500,000, or  total assets (before liabilities) exceed £2.8m and the charity’s gross income is more than £100,000.  The requirement for a PCC to be audited in the two years following a year in which it passed the audit threshold has been removed. 

What does the PCC have to do?

A suitable examiner has to be appointed by the Annual Parochial Church Meeting (APCM). The PCC will have to consider carefully the suitability of a prospective independent examiner in good time to guide the meeting in its appointment.

Can an examiner be paid?

The PCC is entitled to pay a reasonable fee to an independent examiner for their services. If the services of a competent examiner cannot be obtained on a voluntary basis, the PCC should be prepared to pay a modest fee, which is a proper charge on its funds. The PCC should not be pressured into appointing a voluntary person just because they will do the work free of charge. It must be satisfied that they have the requisite ability and experience.