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Charities under scrutiny again: Focus on Auditors and Trustees

With the release of the Public Administration and Constitutional Affairs Committee report, MP’s have heavily criticised both Trustees and the Auditors of Charity Kids Company.

The report highlights the reputational dangers faced by those undertaking a role of diligence and care for a charity and should be a warning for anyone involved in running a Charity. Here we highlight a few articles that will be relevant for different roles within a charity:

Auditors:

Auditors have a huge reputational risk when auditing a charities accounts. Kids Company has seen some very damaging headlines rather critical of auditors. The article linked below explains how accountancy practices can revolutionise the audit process, increase scrutiny without increasing the workload and protect themselves from reputational damage:

Auditors: Adaptation Or Extinction

Trustees:

Trustees have received particular criticism in the MP’s report into Kids Company as they felt there was not adequate reserves and checks in place to ensure protection for the charity. Many of the criticisms levelled at the trustees, however, could easily have been overcome by the introduction of a Cloud accounting system that increases security, provides real-time data and allows the trustees to view KPI’s (such as current reserves against the historical 6 month moving average as an example):

Cloud Accounting Radically Changing The Way We Work

CEO’s and CFO’s:

Those in charge of running Kids Company have had criminal investigations levelled at them and are most at risk from the failure of a Charity. It is the role of the CEO and CFO to ensure that there are adequate security measures in place to reduce the risk of fraud, adequate reporting in place to ensure that trustees have the right and relevant information and adequate systems and procedures in place to ensure the public has confidence in the charity. The consequences of not having these in place can be very damaging indeed:

Charities Reputational Woes Continue

AccountsIQ is a global provider of cloud accounting and real-time consolidation software for accountancy practices and growing mid-sized businesses (especially charities) dealing with multiple entities, locations and currencies. Our highly secure accounts solution is delivered from tier one hosting facilities and accessible 24×7 anywhere in the world. The system has numerous security features relevant to charities and candle SORP requirements including separation of funds and reporting. For more information please have a look at our accounting software for charities or contact sales@accountsiq.com for more information.

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