Charity accounting framework undergoes major overhaul
Major changes to the way the charity accounting framework is developed are set to take place following a comprehensive governance review.
The Charities SORP-making body has set out plans to change the way the charity accounting framework, the Statement of Recommended Practice (SORP), is developed, following a nine-month governance review chaired by professor Gareth Morgan.
Among the key changes is the decision to cut the size of the SORP committee to ensure a stronger culture of constructive challenge, better stability and better representation of small charities and funders with an interest in the impact charities have.
Seven stakeholder groups will also be set up to work in partnership with the SORP committee and ensure a more effective engagement process.
“The recent governance review highlighted some positive aspects of the SORP development process, but it also made some constructive suggestions, particularly that charity reporting and accounting must become more user-focused,” said Myles McKeown, joint chair and head of compliance and enquiries at the Charity Commission for Northern Ireland.
“The changes we are introducing today will lay important foundations to ensure the SORP can continue to be fit for purpose,” Mr McKeown said.
The Morgan review was in response to external criticism of the way the SORP was developed, and in particular a perception that is overly influenced by the views of charities in preparing their accounts and the accounting profession.
The new arrangements are due to be in place by March 2020.
The SORP-making body is made up of the Charity Commission for Northern Ireland, the Charity Commission for England and Wales, and the Scottish Charity Regulator (OSCR). The Charities Regulator (Republic of Ireland) is an observer on the SORP-making body.