Ward Williams Chartered Accountants, Weybridge, Surrey

Charity audit assignments only requiring an audit under the Companies Act 2006

Charity in the United Kingdom, except Scotland, incorporated under the Companies Act - AUDIT

1 Responsibilities of trustees and auditors

1.1 As trustees of the charitable company, you are responsible for keeping proper accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and to enable you to ensure that the financial statements comply with the Companies Act 2006. You are also responsible for preparing financial statements which give a true and fair view and have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice and the Companies Act 2006 and regulations made under it.

1.2 In preparing these financial statements, you are required to:

select suitable accounting policies and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation; and
[large charitable companies only] state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

You also have a responsibility not to approve these financial statements unless you are satisfied that they give a true and fair view.

1.3 As trustees of a charitable company, you have a duty under the Companies Act 2006 to prepare a directors' report and also an annual report for each financial year complying in its form and content with regulations made under the Charities Act 1993. You should also have regard to the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities', issued in 2005 by the Charity Commission for England and Wales, and any subsequent amendments or variations to this statement.

1.4 You are responsible for:

making available to us, as and when required, all the company's accounting records and all other relevant records and related information, including minutes of all management meetings and additional information that we may request. You will also provide us with unrestricted access to persons within the charitable company from whom we determine it is necessary to obtain audit evidence;
safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities;
ensuring that the charitable company complies with laws and regulations that apply to its activities, and for preventing non-compliance and detecting any that occur; and
such internal control as you determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error.

1.5 You are also required to confirm in the directors' report that so far as you are aware, there is no relevant audit information of which we, as the charitable company's auditors, are unaware and that you have taken all the steps that you ought to take as directors in order to make yourselves aware of any relevant audit information and to establish that we are aware of that information. We are entitled to require from the charitable company's officers such other information and explanations as we think necessary for the performance of our duties as auditors.

1.6 Under the Companies Act 2006/Charities Act 1993 we have a statutory responsibility to report to the members whether in our opinion the financial statements give a true and fair view, whether they have been properly prepared in accordance with the Companies Act 2006 or other relevant legislation. We also have a statutory responsibility to state in our report whether in our opinion the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements. In addition, we have a statutory responsibility to report by exception if, in our opinion:

adequate accounting records have not been kept by the charitable company or returns adequate for our audit have not been received from branches not visited by us;
the charitable company's financial statements are not in agreement with the accounting records and returns;
certain disclosures of directors' remuneration specified by law are not made;
we have not obtained all the information and explanations which we consider necessary for the purposes of our audit; or
you have prepared financial statements in accordance with the small companies regime or have taken advantage of the small companies exemption in preparing your directors' report and we are of the opinion that you were not entitled to do so.

If we have nothing to report in respect of the above matters we will include a statement in our report confirming this.

Where the financial statements do not disclose details of directors' benefits: remuneration, pensions and compensation for loss of office, the Companies Act 2006 also requires us, so far as we are reasonably able to do so, to include a statement in our report giving the required particulars.

1.7 Our report will be made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work will be undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. In those circumstances, to the fullest extent permitted by law, we will not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for the audit report, or for the opinions we form.

1.8 The Senior Statutory Auditor for the purpose of s504 of the Companies Act 2006 can be confirmed by reference to your contact partner at Ward Williams.

1.9 Under the Charities (Accounts and Reports) Regulations 2008 and the SORP you are required to report as to whether you have given consideration to the major risks to which the charity is exposed, and to the systems designed to manage those risks. We are not required to audit this statement, or to form an opinion on the effectiveness of the risk management and control procedures.

1.10 We have a statutory duty to report to the Charity Commission (CC) such matters (concerning the activities or affairs of the charity or any connected institution or body corporate) of which we become aware during the course of our audit which are (or are likely to be) of material significance to the CC in the exercise of their powers of inquiry into, or acting for the protection of, charities (The Charities (Accounts and Reports) Regulations 2008).

1.11 We have a professional responsibility to report if the financial statements do not comply in any material respect with applicable accounting standards, unless in our opinion the non-compliance is justified in the circumstances. In determining whether or not the departure is justified we consider whether:

the departure is required in order for the financial statements to give a true and fair view; and
adequate disclosure has been made concerning the departure.

1.12 Our professional responsibilities also include:

inserting in our report a description of the directors' responsibilities for the financial statements where the financial statements or accompanying information do not include such a description; and
considering whether other information in documents containing audited financial statements is consistent with those financial statements.

1.13 The provision of audit services is a business in the regulated sector under the Proceeds of Crime Act 2002 and, as such partners and staff in audit firms have to comply with this legislation which includes provisions that may require us to make a money laundering disclosure in relation to information we obtain as part of our normal audit work. It is not our practice to inform you when such a disclosure is made or the reasons for it because of the restrictions imposed by the ‘tipping off’ provisions of the legislation.

1.14 In the event that we cease to act as statutory auditors for the company we are required by paragraph 9(3) of schedule 10 of the Companies Act 2006 to make available, if requested, all relevant information concerning the audit of the company to our successors as statutory auditors. You agree to cover any reasonable costs of making such information available that we may incur in fulfilling our statutory duty.2

2 Scope of audit

2.1 Our audit will be conducted in accordance with Audit Regulations issues by the ICAEW (which may be inspected at www.icaew.com/auditnews). Our work will also be conducted in accordance with International Standards on Auditing (UK & Ireland) and Ethical Standards both issued by the Auditing Practices Board (www.frc.org.uk/apb/publications/isa.cfm). Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements and will include such tests of transactions and of the existence, ownership and valuation of assets and liabilities as we may consider necessary.

2.2 The expected form and content of our report will be in line with the most recent bulletin on auditors' reports published by the Auditing Practices Board (www.frc.org.uk/apb). However, the form and content of our report may need to be amended in the light of our findings during the course of our work.

2.3 An audit involves performing procedures to obtain audit evidence regarding the amounts and disclosures in the financial statements. The procedures selected will depend on our judgement, including an assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We will also evaluate the appropriateness of the accounting policies used, and the reasonableness of accounting estimates made, by management, as well as evaluating the overall presentation of the financial statements.

2.4 When conducting the audit we will consider materiality and its relationship to risk. Materiality is an expression of the relative significance or importance of a particular matter in the context of the financial statements as a whole, or within any of the individual statements making up the whole.

2.5 For each assignment we will use our judgement to assign a monetary value to materiality and we will assess the relative risk in each area of the assignment. The amount of work we perform area by area will be directly influenced by the value we assign to materiality as adjusted by our perception of the risk applicable to that area. Generally, the greater the perceived risk the more work required.

2.6 Materiality is not capable of general mathematical definition and the assigned value will be arrived at after considering both the quantitative and qualitative aspects of the financial statements.

2.7 The nature and extent of our procedures will vary according to our assessment of the company's accounting system and, the internal control system, and may cover any aspect of the business's operations that we consider appropriate.

2.8 We shall obtain an understanding of the accounting and internal control systems in order to assess their adequacy as a basis for the preparation of the financial statements and to establish whether proper accounting records have been maintained by the company. We shall expect to obtain such appropriate evidence as we consider sufficient to enable us to draw reasonable conclusions therefrom.

2.9 Because of the test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, there is an unavoidable risk that some misstatements, material or otherwise, may remain undiscovered.

2.10 Our audit is not designed to identify all significant weaknesses in the company's systems and internal controls but, if we detect significant weaknesses we shall report them to you in writing. Any such report may not be provided to third parties without our prior written consent. Such consent will be granted only on the basis that the report is in the company's sole interests and was not prepared with the interests of anyone other than the company in mind, and that we accept no duty or responsibility to any other party as concerns the reports.

2.11 As part of our normal audit procedures, we may request you to provide written confirmation of certain oral representations which you may have made to us during the course of the audit. In particular, where misstatements in the financial statements that we bring to your attention are not adjusted, we shall require written representations of your reasons. In connection with representations and the supply of information to us generally, we draw your attention to section 501 of the Companies Act 2006 under which it is an offence for anyone to recklessly or knowingly supply information to the auditors that is false or misleading and to fail to promptly provide information requested.

2.12 In order to assist us with the examination of your financial statements, we shall request sight of all documents or statements, including, as appropriate, the chairman's statement, operating and financial review and the directors' report, which are due to be issued with the financial statements. We are also entitled to receive details of all written resolutions that are to be circulated to members, to attend all the company's general meetings and to receive notice of them all.

2.13 As noted above, you are responsible for safeguarding the company's assets and for preventing and detecting fraud, error and non-compliance with law and regulations. However, we shall plan our audit so that we have a reasonable expectation of detecting significant misstatements in the financial statements or accounting records (including those resulting from such causes), but our examination should not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance as may exist.

2.14 We shall not be treated as having notice, for the purposes of our audit responsibilities, of information provided to members of our firm (principals and staff) other than those engaged on the audit (for example information provided in connection with accounting, taxation and other services).

2.15 Once we have issued our report we have no further direct responsibility in relation to the financial statements for that financial year. However, we expect that you will inform us of any material event occurring between the date of our report and the date the financial statements are sent out in accordance with section 423 Companies Act 2006 which may affect the financial statements.

2.16 In order to ensure that there is effective two-way communication between us and to comply with the requirements of International Standards on Auditing (UK & Ireland) we will:

contact you prior to the audit to discuss any relevant matters and to agree any required action; and
contact you after the audit to discuss any matters arising from the audit and will confirm any agreed action

We shall, of course, contact you more frequently and regularly regarding both audit and other matters during the course of our work.

Incorporated charity in England and Wales incorporated under the Companies Act - INDEPENDENT EXAMINATION

1 Responsibilities of trustees and independent examiners

1.1 As trustees of the charity, you are responsible for maintaining proper accounting records and an appropriate system of internal control for the charity. You are also responsible for preparing the annual report and financial statements which give a true and fair view and have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice and the Companies Act 2006 and regulations thereunder.

1.2 As trustees of a charitable company, you have a duty under the Companies Act 2006 to prepare a directors' report and also an annual report for each financial year complying in its form and content with regulations made under the Charities Act 1993. You should also have regard to the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities', issued in 2005 by the Charity Commission for England and Wales, and any subsequent amendments or variations to this statement.

1.3 Under the Charities Act 1993 we have a statutory responsibility to state whether or not any matters have come to our attention to which in our opinion, attention should be drawn in order to enable a proper understanding of the accounts to be reached, and to report whether or not any matter has come to our attention in connection with the examination which gives us reasonable cause to believe that in any material respect:

proper accounting records have not been kept by the charity in accordance with Section 386 Companies Act 2006;
the accounts are not in agreement with the accounting records; and
the accounts do not comply with the accounting requirements of Section 396 Companies Act 2006 and with the methods and principles of the SORP.

1.4 We are also required to report any of the following matters that have become apparent during the course of our examination:

whether there has been any material expenditure or action which appears not to be in accordance with the trusts of the charity;
whether any information or explanation to which we are entitled under regulation 33 of the Charities (Accounts and Reports) Regulations 2008 has not been afforded to us: and
whether any information in the trustees' statutory annual report is inconsistent in any material respect with that in the financial statements.

1.5 We shall plan our work on the basis that an examination report is required for the year, unless you inform us in writing that either:

the charity requires an audit of the accounts; or
the charity requires neither an audit nor an examination report.

1.6 Should you instruct us to carry out an audit, then a separate letter of engagement will be required.

1.7 Should you inform us that the charity requires neither an audit nor an examination, then we shall have no responsibilities to the charity, except those specifically agreed upon between us in respect of other professional services.

1.8 Should our work lead us to conclude that the charity is not entitled to exemption from an audit of the accounts, or should we be unable to reach a conclusion on this matter, then we will not issue any report and will notify you in writing of the reasons. In these circumstances, if appropriate, we will discuss with you the need to appoint an auditor.

1.9 We have a statutory duty to report to the Charity Commission (CC) such matters (concerning the activities or affairs of the charity or any connected institution or body corporate) of which we become aware during the course of our examination which are (or are likely to be) of material significance to the CC in the exercise of their powers of inquiry into, or acting for the protection of, charities (The Charities (Accounts and Reports) Regulations 2008).

1.10 In common with all accountancy and legal practices, we are required by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 to:

have due diligence procedures for the identification of all clients;
maintain appropriate records of evidence to support customer due diligence; and
report in accordance with the relevant legislation and regulations.

2 Scope of examination

2.1 Our examination will be conducted in accordance with the Charity Commission's 'Directions and Guidance Notes for the Carrying out of an Independent Examination'. Our procedures will consist of comparing the accounts with the accounting records, making limited enquiries of the officers of the charity and only in certain circumstances seeking independent evidence to support entries in the accounting records, or the presentation of the accounts. We shall also review the trustees' report.

2.2 Our examination is not designed to identify all significant weaknesses in the charity's systems but, if such weaknesses come to our notice during the course of our examination which we think should be brought to your attention, we shall report them to you. Any such report may not be provided to third parties without our prior written consent. Such consent will be granted only on the basis that such reports are not prepared with the interests of anyone other than the charity in mind and that we accept no duty or responsibility to any other party as concerns the reports.

2.3 As part of our normal procedures, we may request you to provide written confirmation of oral representations which we have received from you during the course of the examination on matters having a material effect on the account and statement.

2.4 In order to assist us with the examination of your financial statements, we shall request sight of all documents or statements, including the trustees' report, which are due to be issued with the financial statements. If it is proposed that any documents or statements which refer to our name, other than the examined financial statements, are to be circulated to third parties, please consult us before they are issued.

2.5 The responsibility for safeguarding the assets of the charity and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with yourselves. Our examination should not be relied upon to disclose all material misstatements or frauds, errors or instances of non-compliance as may exist.

2.6 We shall not be treated as having notice, for the purposes of our examination responsibilities, of information provided to members of our firm other than those engaged on the examination.

2.7 Once we have issued our report we have no further direct responsibility in relation to the financial statements for that financial year.

2.8 In order to ensure that there is effective two-way communication between us we will:

contact you prior to the examination to discuss any relevant matters and to agree any required action; and
contact you after the examination to discuss any matters arising from the examination and will confirm any agreed action

We shall, of course, contact you more frequently and regularly regarding both examination and other matters during the course of our work.

Unincorporated charity in England and Wales preparing accounts on the accruals basis - INDEPENDENT EXAMINATION

1 Responsibilities of trustees and independent examiners

1.1 As trustees of the charity, you are responsible for maintaining proper accounting records and an appropriate system of internal control for the charity. You are also responsible for preparing the annual report and financial statements which give a true and fair view and have been prepared in accordance with applicable accounting standards and the Charities Act 1993 and regulations thereunder.

1.2 As trustees of a charity, you have a duty to prepare an annual report for each financial year complying in its form and content with regulations made under the Charities Act 1993. You should also have regard to the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities', issued in 2005 by the Charity Commission for England and Wales, and any subsequent amendments or variations to this statement.

accounting records have not been kept by the charity in accordance with Section 41 Charities Act 1993;
the accounts are not in agreement with the accounting records; and
the accounts do not comply with the accounting requirements of the Charities Act 1993.

1.4 We are also required to report any of the following matters that have become apparent during the course of our examination:

whether there has been any material expenditure or action which appears not to be in accordance with the trusts of the charity;
whether any information or explanation to which we are entitled under regulation 33 of the Charities (Accounts and Reports) Regulations 2008 has not been afforded to us: and
whether any information in the trustees' statutory annual report is inconsistent in any material respect with that in the financial statements.

1.5 We shall plan our work on the basis that an examination report is required for the year, unless you inform us in writing that either:

the charity requires an audit of the accounts; or
the charity requires neither an audit nor an examination report.

1.6 Should you instruct us to carry out an audit, then a separate letter of engagement will be required.

1.10 In common with all accountancy and legal practices, we are required by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 to:

have due diligence procedures for the identification of all clients;
maintain appropriate records of evidence to support customer due diligence; and
report in accordance with the relevant legislation and regulations.

2 Scope of examination

2.6 We shall not be treated as having notice, for the purposes of our examination responsibilities, of information provided to members of our firm other than those engaged on the examination.

2.7 Once we have issued our report we have no further direct responsibility in relation to the financial statements for that financial year.

2.8 In order to ensure that there is effective two-way communication between us we will:

contact you prior to the examination to discuss any relevant matters and to agree any required action; and
contact you after the examination to discuss any matters arising from the examination and will confirm any agreed action

We shall, of course, contact you more frequently and regularly regarding both examination and other matters during the course of our work.

Unincorporated charity in England and Wales preparing accounts on the receipts and payments basis - INDEPENDENT EXAMINATION

1 Responsibilities of trustees and independent examiners

1.1 As trustees of the charity, you are responsible for maintaining proper accounting records and an appropriate system of internal control for the charity. You are also responsible for preparing the account and statement in accordance with applicable the Charities Act 1993 and regulations thereunder.

1.2 In accordance with the Charities Act 1993 Section 42(3), where the charity's gross income in any financial year does not exceed £250,000, the charity's trustees may elect to prepare a receipts and payments account and a statement of assets and liabilities as its annual statement of accounts. You have elected to prepare such an account and statement.

accounting records have not been kept by the charity in accordance with Section 41 Charities Act 1993; and
the account and statement are not in agreement with the accounting records.

1.4 We are also required to report any of the following matters that have become apparent during the course of our examination:

whether there has been any material expenditure or action which appears not to be in accordance with the trusts of the charity; and
whether any information or explanation to which we are entitled under regulation 33 of the Charities (Accounts and Reports) Regulations 2008 has not been afforded to us.

1.5 We shall plan our work on the basis that an examination report is required for the year, unless you inform us in writing that either:

the charity requires an audit of the accounts; or
the charity requires neither an audit nor an examination report.

1.6 Should you instruct us to carry out an audit, then a separate letter of engagement will be required.

1.10 In common with all accountancy and legal practices, we are required by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 to:

have due diligence procedures for the identification of all clients;
maintain appropriate records of evidence to support customer due diligence; and
report in accordance with the relevant legislation and regulations.

2 Scope of examination

2.6 We shall not be treated as having notice, for the purposes of our examination responsibilities, of information provided to members of our firm other than those engaged on the examination.

2.7 Once we have issued our report we have no further direct responsibility in relation to the financial statements for that financial year.

2.8 In order to ensure that there is effective two-way communication between us we will:

contact you prior to the examination to discuss any relevant matters and to agree any required action; and
contact you after the examination to discuss any matters arising from the examination and will confirm any agreed action

We shall, of course, contact you more frequently and regularly regarding both examination and other matters during the course of our work.

Unincorporated charity in England and Wales preparing accounts on the accruals basis - AUDIT

1 Responsibilities of trustees and auditors

1.1 As trustees of the charity, you are responsible for maintaining proper accounting records and an appropriate system of internal control for the charity. You are also responsible for preparing the annual report and financial statements which give a true and fair view and have been prepared in accordance with applicable accounting standards and the Charities Act 1993 (‘the Act’) and regulations thereunder.

1.2 As trustees of a charity, you are under a duty to prepare an annual report for each financial year complying in its form and content with regulations made under the Charities Act 1993. You should also have regard to the Statement of Recommended Practice (SORP) ‘Accounting and Reporting by Charities’, issued in 2005 by the Charity Commission for England and Wales, and any subsequent amendments or variations to this statement.

1.3 You are responsible for making available to us, as and when required, all your accounting records and related financial information, including any minutes of management meetings, necessary to carry out our work. You will provide us with all information and explanations relevant to the purpose and compilation of the financial information, and you will disclose to us all relevant information in full. You will also provide us with unrestricted access to persons within the charity from whom we determine it is necessary to obtain audit evidence.

You are also responsible for safeguarding the assets of the charity and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.

1.4 Under the Charities Act 1993 we have a statutory responsibility to report to you as trustees whether in our opinion the financial statements comply with the requirements of regulations made under that Act and whether they give a true and fair view of the state of affairs of the charity at the end of the financial year and of the incoming resources and application of the resources of the charity in that year. In arriving at our opinion, we are required to consider the following matters and report on any in respect of which we are not satisfied:

whether proper accounting records have been kept by the charity and proper returns adequate for our audit have been received from branches not visited by us in accordance with Section 41 of the Charities Act 1993;
whether the charity's balance sheet and income and expenditure account are in agreement with the accounting records and returns;
whether we have obtained all the information and explanations which we consider necessary for the purpose of our audit; and
whether the information in the trustees' annual report is consistent with the financial statements.

If we have nothing to report in respect of the above matters we will include a statement in our report confirming this.

1.5 Our report will be made solely to the charity's trustees, as a body, in accordance with Section 43 of the Charities Act 1993 and regulations made under section 44 of that Act. Our audit work will be undertaken so that we might state to the charity's trustees those matters we are required to state to them in an auditor's report and for no other purpose. In those circumstances, to the fullest extent permitted by law, we will not accept or assume responsibility to anyone other than the charity and its trustees as a body, for our audit work, for the audit report, or for the opinions we form.

1.6 Under the Charities (Accounts and Reports) Regulations 2008 and the SORP you are required to report as to whether you have given consideration to the major risks to which the charity is exposed and to the systems designed to manage those risks. We are not required to audit this statement, or to form an opinion on the effectiveness of the risk management and control procedures.

1.7 We have a statutory duty to report to the Charity Commission (CC) such matters (concerning the activities or affairs of the charity or any connected institution or body corporate) of which we become aware during the course of our audit which are (or are likely to be) of material significance to the CC in the exercise of their powers of inquiry into, or acting for the protection of, charities (The Charities (Accounts and Reports) Regulations 2008).

1.8 We have a professional responsibility to report if the financial statements do not comply in any material respect with applicable accounting standards, unless in our opinion the non-compliance is justified in the circumstances. In determining whether or not the departure is justified we consider whether:

the departure is required in order for the financial statements to give a true and fair view, and;
adequate disclosure has been made concerning the departure.

1.9 Our professional responsibilities also include:

inserting in our report a description of the trustees' responsibilities for the financial statements where the financial statements or accompanying information do not include such a description, and;
considering whether other information in documents containing audited financial statements is consistent with those financial statements.

1.10 The provision of audit services is a business in the regulated sector under the Proceeds of Crime Act 2002 and, as such, partners and staff in audit firms have to comply with this legislation which includes provisions that may require us to make a money laundering disclosure in relation to information we obtain as part of our normal audit work. It is not our practice to inform you when such a disclosure is made or the reasons for it because of the restrictions imposed by the ‘tipping off’ provisions of the legislation.

2 Scope of audit

2.6 Materiality is not capable of general mathematical definition and the assigned value will be arrived at after considering both the quantitative and qualitative aspects of the financial statements

2.7 The nature and extent of our procedures will vary according to our assessment of the charity's accounting system and, the internal control system, and may cover any aspect of the business's operations that we consider appropriate.

2.8 We shall obtain an understanding of the accounting and internal control systems in order to assess their adequacy as a basis for the preparation of the financial statements and to establish whether proper accounting records have been maintained by the charity. We shall expect to obtain such appropriate evidence as we consider sufficient to enable us to draw reasonable conclusions therefrom.

2.10 Our audit is not designed to identify all significant weaknesses in the charity's systems and internal controls but, if we detect significant weaknesses we shall report them to you in writing. Any such report may not be provided to third parties without our prior written consent. Such consent will be granted only on the basis that the report is in the charity's sole interests and was not prepared with the interests of anyone other than the charity in mind, and that we accept no duty or responsibility to any other party as concerns the reports.

2.13 As noted above, you are responsible for safeguarding the charity's assets and for preventing and detecting fraud, error and non-compliance with law and regulations. However, we shall plan our audit so that we have a reasonable expectation of detecting significant misstatements in the financial statements or accounting records (including those resulting from such causes), but our examination should not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance as may exist.

2.15 Once we have issued our report we have no further direct responsibility in relation to the financial statements for that financial year. However, we expect that you will inform us of any material event occurring between the date of our report and that of the Annual General Meeting which may affect the financial statements.

2.16 In order to ensure that there is effective two-way communication between us and to comply with the requirements of International Standards on Auditing (UK & Ireland) we will:

contact you prior to the audit to discuss any relevant matters and to agree any required action; and
contact you after the audit to discuss any matters arising from the audit and will confirm any agreed action

We shall, of course, contact you more frequently and regularly regarding both audit and other matters during the course of our work.

Unincorporated charity in England and Wales preparing accounts on the receipts and payments basis - AUDIT

1 Responsibilities of trustees and auditors

1.1 As trustees of the charity, you are responsible for maintaining proper accounting records and an appropriate system of internal control for the charity and for preparing the account and statement in accordance with the Charities Act 1993 (‘the Act’) and regulations there under.

1.2 In accordance with the Charities Act 1993 Section 42(3), where the charity's gross income in any financial year does not exceed £250,000, the charity's trustees may elect to prepare a receipts and payments account and a statement of assets and liabilities (as its annual statement of accounts). You have elected to prepare such an account and statement.

You are also responsible for safeguarding the assets of the charity and hence taking reasonable steps for the prevention and detection of fraud and other irregularities.

1.4 Under the Charities Act 1993 we have a statutory responsibility to report to you as trustees whether in our opinion the account and statement properly present the receipts and payments of the charity for the financial year and its assets and liabilities at the end of that year and that the account and statement adequately distinguish any material special trust or other restricted fund of the charity. In arriving at our opinion, we are required to consider the following matters, and report on any in respect of which we are not satisfied:

whether proper accounting records have been kept by the charity and proper returns adequate for our audit have been received from branches not visited by us in accordance with Section 41 of the Charities Act 1993;
whether the account and statement are in agreement with the accounting records;
whether we have obtained all the information and explanations which we consider necessary for the purpose of our audit; and
whether the information in the trustees' annual report is consistent with the account and statement.

1.6 We have a statutory duty to report to the Charity Commission (CC) such matters (concerning the activities or affairs of the charity or any connected institution or body corporate) of which we become aware during the course of our audit which are (or are likely to be) of material significance to the CC in the exercise of their powers of inquiry into, or acting for the protection of, charities (The Charities (Accounts and Reports) Regulations 2008).

1.7 Our professional responsibilities also include:

inserting in our report a description of the trustees' responsibilities for the account and statement where the account and statement or accompanying information do not include such a description; and
considering whether other information in documents containing the audited account and statement is consistent with the account and statement.

1.8 The provision of audit services is a business in the regulated sector under the Proceeds of Crime Act 2002 and, as such, partners and staff in audit firms have to comply with this legislation which includes provisions that may require us to make a money laundering disclosure in relation to information we obtain as part of our normal audit work. It is not our practice to inform you when such a disclosure is made or the reasons for it because of the restrictions imposed by the ‘tipping off’ provisions of the legislation.

2 Scope of audit

2.6 Materiality is not capable of general mathematical definition and the assigned value will be arrived at after considering both the quantitative and qualitative aspects of the financial statements

2.8 We shall obtain an understanding of the accounting and internal control systems in order to assess their adequacy as a basis for the preparation of the financial statements and to establish whether proper accounting records have been maintained by the charity. We shall expect to obtain such appropriate evidence as we consider sufficient to enable us to draw reasonable conclusions therefrom.

2.15 Once we have issued our report we have no further direct responsibility in relation to the financial statements for that financial year. However, we expect that you will inform us of any material event occurring between the date of our report and that of the Annual General Meeting which may affect the financial statements.

2.16 In order to ensure that there is effective two-way communication between us and to comply with the requirements of International Standards on Auditing (UK & Ireland) we will:

contact you prior to the audit to discuss any relevant matters and to agree any required action; and
contact you after the audit to discuss any matters arising from the audit and will confirm any agreed action

We shall, of course, contact you more frequently and regularly regarding both audit and other matters during the course of our work.