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The SORP governance review panel says charity reporting and accounting must be refocussed with the views and needs of the users of charity reports and accounts at its centre.
A panel set up to review the future development of charity reporting and accounting has published its final report making a number of recommendations under five key themes.
Among the recommendations, the panel judged that reporting requirements for smaller charities should be simplified, while the Statement of Recommended Practice (SORP) committee should be reformed regarding its size and composition.
Furthermore, the panel said that broader and ongoing engagement is needed with a much wider group of stakeholders if the SORP is to continue to be fit for purpose.
The UK government explained that the recommendations are being made in order to ensure that the way that charities report on their work and account for their income under the SORP can meet new public expectations and are fit for the future.
"I was delighted when the charity regulators launched this review and I was honoured to act as the independent chair. As an academic, and as a charity practitioner, I am aware of the strengths of the Charities SORP but I have also been aware of concerns expressed by some.
"Our consultation led to a wide range of really constructive suggestions, and I am confident that if the panel’s recommendations are implemented the SORP will be considerably more effective in future," said the Charities SORP committee governance review panel chair, professor Gareth Morgan.
The Charities SORP (Statement of Recommended Practice on Accounting and Reporting by Charities) sets out the financial reporting requirements that apply to almost all charities preparing accounts designed to give a true and fair view. The four charity regulators in the UK and Republic of Ireland held a governance review of the constitution and composition of the Charities SORP committee and the SORP making process over the last 9 months.
The governance review was undertaken by an oversight panel comprising a representative from each of the four charity regulators and an observer representative nominated by the FRC.