Charities

This section of the website is intended as a guide, and should not be construed as legal advice or an authoritative statement of the law.

Changes to Charity Audit Requirements

Changes to Charity Audit Requirements As of 1st April, 2007, the statutory requirements relating to the audit of Manx Registered Charity accounts was amended (via the coming into operation of the Audit Act 2006). Whilst previously, section 5 of the Charities Registration Act 1989 required all Manx registered charities to file fully audited accounts with the General Registry, under the amended section 5 a new three tier audit/examination requirement was introduced based upon the annual gross income of the charity.

In summary the revised audit/examination requirements are:

Charity's Gross Income in the Accounting Year	Statutory Requirement for External Examination of Charitys Accounts
Less than or equal to 5,000	No requirement for external examination (charities still have to file accounts with the General Registry within 6 months of year end.)
Greater than 5,000 but less than or equal to 100,000	Full Audit or an independent examination by an accountant, a qualified independent examiner or a person approved by the First Deemster
Greater than 100,000	Full Audit by an accountant or a person approved by the First Deemster

Whilst these amendments were not implemented until the 1st April, they apply to all charity accounts with a year end date of 1st November, 2006 or later.

However, it should also be remembered that, in addition to these statutory requirements, the charity will also have to comply with any specific account requirements detailed within its governing document (e.g. constitution/trust deed/memorandum and articles of association etc...).

In order to implement these amendments, new regulations (The Charities Regulations 2007) have been made by their Honours The Deemsters which were approved by Tynwald on the 21st March.

In summary, these new regulations:

Prescribe the qualifications for independent examiners (in addition to accountants or approved persons please see enclosed list);
Prescribe the form of the independent examiners reports;
Define the term Gross Income as it should be applied to charity accounts in determining statutory audit/examination requirements.

In addition, the General Registry has developed guidance on independent examinations to assist charities and independent examiners.

Copies of:

The amended Charities Registration Act 1989
The new Charities Regulations 2007;
The Report to be used by Independent Examiners (in editable form);
Guidance On Independent Examinations;

are now available for download from this website.

It is anticipated that these amendments will assist Manx charities in fulfilling their statutory obligations whilst maintaining appropriate accountability to the public. I would also like to take this opportunity to thank all those who participated in the consultation exercise which influenced the development of the new regulations.

INDEPENDENT EXAMINERS QUALIFICATIONS

(As Prescribed by Charities Regulations 2007)

Independent Examiners of Charity Accounts should either be:

An accountant (as defined by s3 of the Interpretation Act 1976);
Or: A person approved by the First Deemster;
Or hold one of the following qualifications:

Governing Body	Qualification
ICSA - Institute of Chartered Secretaries & Administrators	ACIS - Associate of the Chartered Institute of Secretaries
ICSA - Institute of Chartered Secretaries & Administrators	FCIS - Fellow of the Chartered Institute of Secretaries
CIB - The Chartered Institute of Bankers	ACIB Associate of The Chartered Institute of Bankers
CIBS - The Chartered Institute of Bankers in Scotland	MCIBS - Member of the Chartered Institute of Bankers in Scotland
ACCA - Association of Chartered Certified Accountants	CAT - Certified Accounting Technician
ACCA - Association of Chartered Certified Accountants	Diploma in Financial Management
AAT - Association of Accounting Technicians	AAT - Association of Accounting Technicians
ICAEW - Institute of Chartered Accountants in England & Wales	Diploma in Charity Accounting
CIPFA - Chartered Institute of Public Finance and Accountancy	Certificate in Charity Finance & Accountancy
CIPFA - Chartered Institute of Public Finance and Accountancy	Diploma in Public Audit
AIA - The Association of International Accountants	AAIA - Associate of the Association of International Accountants
AIA - The Association of International Accountants	FAIA - Fellow of the Association of International Accountants
AAPA - The Association of Authorised Public Accountants	AAPA - Associate of the Authorised Public Accountants
IIA - The Institute of Internal Auditors UK & Ireland	PIIA - Diploma in Internal Audit Practice
IIA - The Institute of Internal Auditors UK & Ireland	MIIA - Advanced Diploma in Internal Auditing and Management
ACT The Association of Corporate Treasurers	AMCT Diploma in Corporate Treasury Management
IFA The Institute of Financial Accountants	FFA Fellow of the Institute of Financial Accountants