How to Guide COVID-19: Charities SORP Committee Guidance
Uniquely and reflecting the unprecedented times we are living through, the Charity SORP Committee has issued guidance to supplement the Charity Statement of Recommended Practice (SORP) on the single issue of the COVID-19 pandemic. This guidance was Issued on 23 March 2020 and can be found on the Charity SORP website here.
It presents a timely reminder that financial statements must provide a true and fair view, and there can seldom have been a single issue that has so dominated the lives of everyone, so it must not be ignored in financial reporting. This is advisory guidance only, not mandatory, but is undeniably helpful. It is relevant for those currently finalising their statutory financial statements as well as those planning for their year-end process.
The guidance is helpful for both preparers of financial statements and those that scrutinise them, whether auditors or independent examiners.
At MHA MacIntyre Hudson we consider that for our audits and independent examinations we should adopt a case-by-case approach for each of our clients, and a blanket or boiler-plated response is not helpful nor appropriate. So, we are keen to discuss these issues with our clients as soon as possible.
Given the all-encompassing impact of COVID-19 on our lives it is not surprising that the guidance indicates that this consideration should include its effect on charities’ financial reporting in their statutory financial statements and any impact on financial sustainability. The effect on each individual charity may be widely different, both negative and positive, hence this will need to be made clear to readers of the financial statements. As a result, there cannot be a standard approach to financial reporting, and each charity will need to assess their own particular circumstances and reflect this in their financial statements appropriately.
A summary of the five main areas that charities need to consider:
- Trustees Annual Report
- Accounting Policies
- Accounting Considerations
- Audit and External Scrutinies
- Charity Reporting to Regulators
Download a copy of the guide below or contact the Head of our Not for Profit team:
Head of Not for Profit, Partner
T: +44 (0)20 7429 0547