APB note tackles charity questions
The controversial whistle-blowing duty placed on charity auditors is tackled in the latest practice note issued by the Auditing Practices Board.
The statutory whistle-blowing duty was introduced by the Charities Act 1993 and the Charities (Accounts and Reports) Regulation of (E&W) 1995.
The Audit of Charities Practice Note lists a number of circumstances, not covered by the old guidelines, in which auditors should report certain matters to the Charity Commission.
Adrian Randall, director of Charities Unit at Moores Rowland, said: ‘This clarification was necessary because the original whistle-blowing concept was a bit vague. However, there is still the question as to where charitable companies stand on whistle-blowing, as companies are not covered by the 1995 Regulations.’
Pesh Framjee, partner in charge of Binder Hamlyn’s Charity Unit, said: ‘Although the statutory whistle-blowing obligation under the Charities Act 1993 only applies to unincorporated charities, the APB is indicating through the practice note that it wants to see it apply to incorporated charities.’
Shelagh McAlpine, APB under-secretary responsible for the practice note, said: ‘In the case of incorporated charities, the auditor should consider closely the requirement to report to the appropriate regulatory authority.
The auditor should judge it in terms of the need to disclose the matter in the public interest.’
She added that as the practice note was not law, it gave no greater protection to auditors of corporate charities against a breach of client confidentiality.
But McAlpine emphasised that by following the guidelines auditors would be better off than before and may have a defence in common law.
