Whistleblowing by auditors on matters of material significance
Following a consultation last autumn, the Charity Commission and other charity regulators have released revised guidance, effective from 1 May 2017, for auditors and independent examiners in relation to their client whistleblowing responsibility on “matters of material significance” reportable to UK charity regulators.
The revised guidance has been developed into a final list of nine matters, which now includes two new areas of reporting:
a requirement to report when a modified audit opinion or qualified independent examiner’s report is issued; and
a requirement to report when there is evidence that conflicts of interests or related party transactions have not been properly declared.
The original proposed list of matters included:
a requirement that auditors report where any recommendations made following their audit, such as in an Audit Findings Report, are not followed up by their client; and
a requirement for auditors and independent examiners to report where they believe a charity does not manage its relationships well.
MacIntyre Hudson were among those who responded to the Charity Commission during the consultation process to disagree with these and other matters, and were ultimately successful in having these excluded from the list.
Since the expected result is increased reporting to regulators, do contact us should these changes cause you any concern.
For more information, contact Sudhir Singh, Head of Not for Profit sector team