Audit
- Charities and companies have different thresholds for determining whether a full statutory audit is required.
- For charities (England & Wales), from accounting periods ending on or after 30 September 2026 under SORP 2026, a statutory audit will be required if:
- Annual income exceeds £1,500,000 (increased from £1,000,000); or
- Gross assets exceed £5,000,000 and annual income exceeds £500,000 (previously £3.26m assets and £250k income).
- Charities below these thresholds may opt for an independent examination. The lower threshold for requiring a qualified independent examiner is rising from £25,000 to £40,000.
- Additionally, non-company charities with income under £500,000 may now prepare receipts-and-payments accounts instead of full accrual accounts under SORP.
- For UK private (non-charity) companies (from 6 April 2025), audit exemption may apply if at least two of the following criteria are met:
Turnover of £15 million or less
Assets of £7.5 million or less
50 or fewer employees (unchanged)
- Organisations not legally required to have an audit may still choose to do so where the governance benefits are proportionate to cost. Some funders and grant-makers — especially in the arts and charity sectors — continue to require audited accounts as a condition of funding, even when thresholds are not met.
- The government has now revised charity reporting thresholds via SORP 2026, introducing a more “proportionate and tiered” regime. Organisations expecting income or asset growth should actively monitor, as future audits may become mandatory.
- An internal audit is a service that is contracted at a board’s discretion to review internal controls, financial procedures and operational processes, identifying improvements in risk mitigation and ensuring value for money. An internal audit may also be called upon to undertake fraud and corruption investigations. It is invariably the preserve of the largest arts institutions and is very rarely found in small and medium-sized organisations.
For full guidance see the ICAS website ICAS website
