How Do I Choose the Right Independent Examiner or Auditor

Introduction

Charity law requires all registered charities to check their annual accounts through either an independent examination or an audit, depending on income and asset levels. These reviews confirm that your charity’s finances are accurate and properly managed.

Choosing the right professional is important. A good independent examiner or auditor helps trustees fulfil their legal duties, improves financial controls, and builds public trust. Selecting the wrong one can lead to compliance issues or unnecessary costs.

Independent examination or audit what is the difference

An independent examination is a review of your charity’s accounts by someone independent of the charity who checks that they are consistent with financial records and comply with accounting rules.

An audit is more detailed and provides a higher level of assurance. It involves testing systems, verifying transactions, and expressing a formal opinion on whether the accounts give a true and fair view.

In England and Wales:

Charities with an income between £25,000 and £1 million (and assets below £3.26 million) normally require an independent examination.

Charities with income over £1 million, or income above £250,000 with assets exceeding £3.26 million, must have a full audit.

Understanding which applies to your charity is the first step in choosing the right person for the job.

What to look for in an independent examiner or auditor

1. Relevant qualifications

For smaller charities with income below £250,000, an independent examiner does not need to be professionally qualified but should have a good understanding of bookkeeping and charity accounting.

For charities with income over £250,000, the examiner must be a member of a professional body such as:

Association of Chartered Certified Accountants (ACCA)

Institute of Chartered Accountants in England and Wales (ICAEW)

Chartered Institute of Public Finance and Accountancy (CIPFA)

Institute of Chartered Accountants of Scotland (ICAS)

If your charity requires a full audit, you must appoint a registered auditor who holds the appropriate licence to conduct statutory audits under the Companies Act.

2. Charity experience

Charity accounting is different from commercial accounting. It includes restricted and unrestricted funds, donation tracking, and regulatory reporting to the Charity Commission.

Look for someone with proven experience working with charities of a similar size or sector. They will understand the reporting framework known as the Charities SORP (Statement of Recommended Practice) and be familiar with common funding arrangements, grant audits, and trustee responsibilities.

3. Independence

Your examiner or auditor must be completely independent of your charity. This means they cannot:

Be a trustee, employee, or close relative of anyone managing the charity.

Have any financial interest in the organisation.

Be involved in preparing the charity’s accounts or day-to-day finances.

Independence ensures that the review is impartial and credible.

4. Reputation and references

Ask for references from other charities or organisations they have worked with. Check online reviews or professional directories to confirm their credentials. A strong reputation for accuracy, integrity, and professionalism is a good indicator of reliability.

5. Communication and approach

The best examiners and auditors communicate clearly and work collaboratively with trustees. They should explain technical matters in plain language, provide useful feedback, and help you understand any findings.

During your first meeting, consider whether they:

Listen to your charity’s needs.

Explain their process and timelines clearly.

Provide an estimate of fees upfront.

Offer practical suggestions without overstepping their independent role.

6. Understanding of charity governance

An effective auditor or examiner will not only check numbers but also assess whether your financial systems and governance are robust. They can identify areas for improvement, such as record-keeping, internal controls, and financial reporting.

Choose someone who takes the time to understand your charity’s structure, funding sources, and challenges.

How to find suitable candidates

Professional directories: Search the websites of accountancy bodies such as ACCA or ICAEW for members specialising in charity work.

Local recommendations: Ask other charities in your area who they use and whether they would recommend them.

Charity networks: Contact your local Council for Voluntary Service (CVS) or charity support organisation for referrals.

Existing advisors: If your charity already works with a bookkeeper or accountant, they may be able to recommend qualified examiners or auditors.

Shortlist at least two or three candidates so you can compare experience, approach, and costs.

Questions to ask before appointment

Before appointing an examiner or auditor, trustees should ask:

What experience do you have with charities of our size and type?

Are you familiar with the Charities SORP and relevant legislation?

Are you fully independent of our charity?

How will you communicate your findings and recommendations?

What are your fees and payment terms?

How long will the process take from start to finish?

Their responses will help you assess both competence and compatibility with your organisation.

Agreeing terms of engagement

Once you have chosen your examiner or auditor, agree on written terms of engagement. This document should include:

The scope of the work (independent examination or audit).

The responsibilities of both the examiner/auditor and the charity.

The timeline for completion.

Fees and payment structure.

How findings will be reported to trustees.

Having these details in writing avoids confusion and ensures transparency throughout the process.

Managing the working relationship

Trustees should maintain open communication with their examiner or auditor throughout the review. Provide all requested documents promptly, including bank statements, receipts, minutes of meetings, and financial reports.

A cooperative approach helps the review progress smoothly and allows trustees to learn from the findings.

After the review, discuss any recommendations for improvement and agree on actions to strengthen financial management in the future.

Typical costs

Fees vary depending on the size of your charity, the complexity of your accounts, and the level of assurance required. As a general guide:

Independent examinations for small charities may cost between £300 and £1,000.

Audits for larger charities can range from £1,000 to £10,000 or more.

Always request a written quote before agreeing to any work, and ensure the cost is proportionate to your charity’s income and reporting requirements.

The trustees’ role

Even with an auditor or examiner in place, trustees remain legally responsible for the accuracy of the charity’s accounts and for ensuring proper financial controls. The examiner or auditor’s work supports trustees but does not replace their duties.

Trustees should review and approve the final accounts and include the signed report in their annual submission to the Charity Commission.

Common mistakes to avoid

Choosing someone without charity experience.

Failing to confirm independence.

Not agreeing terms of engagement in writing.

Leaving the appointment too close to filing deadlines.

Treating the process as a formality instead of a valuable review.

Avoiding these pitfalls ensures a smoother, more effective examination or audit.

Conclusion

Choosing the right independent examiner or auditor is about more than meeting legal requirements. It is an opportunity to strengthen your charity’s financial governance, improve systems, and build public confidence.

Look for a qualified, independent professional with proven charity experience and a collaborative approach. By making an informed choice, trustees can ensure that their charity’s accounts are accurate, compliant, and ready to support the organisation’s long-term success.