The Latest Charity Audit Guidance – Best Practice

The Latest Charity Audit Guidance – Best Practice

The UK Charities Audit Practice Note (PN 11) is the nearest available guidance that charity auditors in Ireland have to professional best practice for external audit work on charities and non-profit entities.

The latest version of PN 11 is currently out for consultation in a bid to improve the quality and effectiveness of the audit of charities. It updates the previous version, last published in 2012.

Charity audits are high risk. Auditors have always been expected to have relevant knowledge corresponding to the task in hand. The new proposals reiterate this point, requiring audit teams to have:

  • suitable understanding of the type of charity being audited;
  • the key risks affecting the charity;
  • the applicable legislative framework;
  • the principles of FRS 102;
  • the Charities SORP (Statement of Recommended Practice);
  • the charity’s governing documents, which may include specific reporting requirements;
  • the legal responsibilities and duties of charity trustees, and
  • the regulatory framework within which charities operate.

The main changes in the document are a response to the introduction of FRS 102 and the revised SORP accounting regime as well as other legislative changes in the UK. It is expected that Ireland will implement the FRS 102 Charity SORP sometime in 2018, once the legal requirements in the Irish Charities Act, 2009 are updated to include charities that are companies.

What is changing in PN11?

The new PN is much shorter than before– nearly half the length of previous versions –based on a policy decision from the Financial Reporting Council (FRC) to remove duplication of material from within the practice note and from the ISAs. It means that users may need to cross-refer more often in future to other sources of information.

Going concern

Going concern will be of special interest, as more charities face increasing funding pressures. The PN includes a revised list of events that may cast doubt on the going concern assumption, including the failure to meet reserve targets, and regulatory investigation.

Consultation closing date

The closing date for the consultation is 25 August 2017 and the ED is available at this link PN 11 exposure draft.


To hear more about the Accounting and Audit of Charities/Not for Profit Entities, come to our next CPD course on the topic on Thursday 30 November 2017.

We also have other CPD courses in November 2017. Click here for details and booking on all courses.