Treasurers > Reporting and Accounting > Audit or Independent Examination? > Duties of an Independent Examiner

Duties of an Independent Examiner

An independent examination involves a review of the accounting records kept by the PCC and a comparison of the financial statements presented with those records. It is a formal exercise, which must be properly planned, controlled and recorded. It also involves a review of the financial statements and consideration of any unusual items or disclosures identified. The level of scrutiny required and the procedures undertaken in an examination do not provide the evidence that would be required in an audit.

An independent examiner is required to do the following.

• Carry out such specific procedures as are considered necessary to provide a reasonable basis on which to conclude that the PCC falls within the threshold for independent examination and that a full audit is not required and that where R & P Accounts are prepared the PCC may properly elect to prepare them.
• Obtain an understanding of the PCC's organization, accounting systems, activities and nature of its assets, liabilities, incoming resources and application of resources in order to plan the specific examination procedures appropriate to the circumstances of the PCC.
• Record the examination procedures carried out and any matters which are important to support conclusions reached or statements provided in the examiner's report.
• Compare the financial statements of the PCC with the PCC's accounting records in sufficient detail to provide a reasonable basis on which to decide whether the accounts are in accordance with such accounting records.
• Review the accounting records maintained in accordance with section 41 of the Charities Act 1993 in order to provide a reasonable basis for the identification of any material failure to maintain such records.
• Carry out analytical procedures to identify unusual items or disclosures in the financial statements. Where concerns arise from these procedures, the examiner must seek explanations from the PCC. If, after following such procedures, the examiner has reason to believe that in any respect the financial statements may be materially mis-stated then additional procedures, including verification of the asset, liability, incoming resource or application of resources, must be carried out.
• Carry out such detailed procedures, as the examiner considers necessary to provide a reasonable basis on which to decide whether or not the financial statements comply with the requirements of the Church Accounting Regulations 2006 as to the form and content of PCC financial statements.
• Review and assess all conclusions drawn from the evidence obtained from the examination and consider the implications on the report to be made under the Church Regulations. If the examiner has cause to make a positive statement on any matter arising from the provisions of the Church Regulations, or to make a statement on any matter arising from the provisions of the Regulations, then the examiner must ensure so far as practicable that the report so made gives a clear explanation of the matter and of its financial effects on the financial statements presented.
• Inform the Charity Commissioners in writing if, whilst acting in the capacity of the examiner of a PCC, information or evidence is obtained which gives the examiner reasonable cause to believe that any one or more of the members of the PCC has been responsible for deliberate or reckless misconduct in the administration of the PCC.
• Issue a report to the PCC, which must be attached to the financial statements whenever they are distributed or otherwise made available. The standard form of report is shown here.