A charity audit inspects a non-profit’s financial records, ensuring funds serve their intended purpose. Charities handle donations, grants, and sponsorships, making financial accountability essential.
An audit verifies that financial statements remain accurate and operations follow legal and ethical guidelines. Many charities undergo audits due to legal obligations or funding requirements. Others conduct audits voluntarily to reinforce financial discipline and strengthen stakeholder confidence.
Who Needs a Charity Audit?
Not every charity requires an audit, but many benefit from one. In the UK and Singapore, audit rules depend on factors like annual income, financial structure, and governance policies.
A charity should consider an audit if:
- Its income surpasses the legal threshold for mandatory audits.
- Funders or regulatory bodies demand audited accounts.
- Trustees request an independent financial assessment.
- The organisation seeks to enhance financial controls and mitigate risks.
Even when not legally required, an audit demonstrates financial responsibility and encourages donor trust.
The Charity Audit Process
1. Preparing for the Audit
Before auditors begin their work, the charity must assemble essential documents:
- Financial statements – income reports, expenditure logs, and balance sheets.
- Donation records – fundraising summaries, grant agreements, and sponsorship details.
- Payroll and expense reports – salaries, allowances, and operational costs.
- Invoices, receipts, and bank statements – proof of transactions.
- Compliance documents – tax filings, legal registrations, and governance policies.
A well-organised financial record expedites the audit and prevents unnecessary delays.
2. Examining Financial Records
Auditors scrutinise financial transactions to confirm accuracy and consistency. They check whether income and expenses align with recorded data. If inconsistencies arise, they seek clarifications and request supporting documents.
They also evaluate the charity’s internal financial controls, ensuring systems detect fraud, mismanagement, or reporting errors.
3. Assessing Compliance and Risk
Charities must comply with legal, financial, and ethical standards. Auditors verify that the organisation meets:
- Charity commission regulations (UK charities).
- Companies Act and financial policies (Singapore charities).
- Contractual obligations with funders and donors.
They identify risks such as financial inefficiencies, conflicts of interest, and regulatory breaches. If weaknesses emerge, they provide solutions to enhance compliance and governance.
4. Delivering the Audit Report
Once the audit concludes, the auditors compile a detailed report outlining:
- Findings on financial accuracy and governance.
- Identified risks or operational weaknesses.
- Recommendations to strengthen financial practices.
The report serves as a guide for trustees, funders, and regulators. A well-executed audit reassures stakeholders and promotes accountability.
Key Benefits of a Charity Audit
1. Reinforces Donor Trust
Supporters expect transparency in financial matters. A well-documented audit reassures them that their contributions fund the charity’s mission, encouraging long-term involvement.
2. Strengthens Financial Controls
Audits highlight weak financial processes, allowing organisations to rectify inefficiencies and prevent errors. Robust internal controls improve operational security.
3. Ensures Legal and Regulatory Compliance
Non-compliance can lead to penalties or reputational damage. An audit ensures the charity aligns with statutory requirements and financial best practices.
4. Expands Funding Opportunities
Many grant providers, corporate sponsors, and government agencies require audited financial statements before awarding funds. A successful audit enhances eligibility for financial support.
5. Improves Financial Precision
Errors in financial statements can distort budgeting and decision-making. An audit corrects inaccuracies and fosters sound financial planning.
6. Supports Organisational Growth
Charities need structured financial systems to expand their impact. An audit helps leaders refine financial strategies, manage risks, and plan for sustainable growth.
Why Choose Us?
A thorough and reliable audit depends on expertise, clarity, and professionalism. We specialise in charity audits, delivering precise financial assessments with integrity.
- Proven Expertise in Charity Audits: Our team possesses deep knowledge of non-profit finance. We understand the unique challenges charities face and tailor our approach accordingly.
- Clear and Structured Process: We simplify the audit journey. Our team provides guidance at every stage, ensuring full understanding of findings and recommendations.
- Customised Audit Solutions: Every charity operates differently. We adapt our methodology to suit your organisation’s size, structure, and financial needs.
- Compliance and Best Practices: We uphold the highest standards of regulatory compliance, helping charities navigate complex financial regulations with confidence.
- Cost-Effective and Reliable Services: A high-quality audit should remain accessible. We offer transparent pricing and deliver value-driven audit solutions without unnecessary costs.