Independent Examiner Vs Auditor: Which Does Your Charity Need

Every UK charity above the smallest tier needs some form of external scrutiny on its annual accounts. The question for trustees is which form: an independent examination or a full statutory audit. The answer is mostly mechanical (income and asset thresholds) but partly judgement (funder requirements, complexity, public expectation). This guide walks through both routes so the board can make the call before year-end with confidence.

Start with the legal thresholds

The Charities Act 2011 sets the baseline. For charities in England and Wales:

• Gross income under 25,000 pounds: no statutory requirement for external scrutiny, though trustees may still choose to commission one.
• Gross income 25,000 to 1,000,000 pounds: independent examination is sufficient unless audit is required by funder, constitution or company law.
• Gross income over 1,000,000 pounds, or over 250,000 pounds with assets over 3,260,000 pounds: full statutory audit by a registered auditor.

Scottish charities (OSCR) and Northern Irish charities (CCNI) have similar but not identical thresholds; confirm against the regulator that governs your charity. Charitable companies also fall under Companies Act audit rules, which can trigger audit at lower thresholds than the Charities Act alone.

When trustees should choose audit even if not required

Several common situations push a charity above the threshold into voluntary audit territory:

1. A major institutional funder (NLCF, Children in Need, EU successor funds, large local authority contracts) requires audited accounts as a grant condition.
2. The charity runs a trading subsidiary with material turnover and trustees want a single consolidated audit covering both entities.
3. The charity is preparing for a merger, a regulated activity application, or a public fundraising appeal where audited accounts strengthen credibility.
4. Income is volatile around the threshold (e.g. one large grant tips the year over 1,000,000 pounds), and trustees want consistency across years.

What an independent examination actually covers

Independent examination is a limited-assurance review, not an audit. The examiner reads the accounting records, compares them to the prepared accounts, considers whether the accounts comply with the Charities SORP (where applicable), and reports any matters of concern to the trustees and (in defined circumstances) to the Charity Commission.

What the examiner does not do: test transactions in detail, verify all balances, attend stock counts, or issue an opinion on a true and fair view. The examiner reports negatively (no matters arising) rather than positively (true and fair).

Who can act as examiner

For charities with gross income under 250,000 pounds, any independent person whom trustees reasonably believe has the ability and practical experience to do the job. For charities between 250,000 and 1,000,000 pounds, the examiner must hold a recognised accountancy qualification (ICAEW, ACCA, CIPFA, AAT, ACIE membership, and similar bodies listed in the Act).

What a statutory audit involves

A statutory audit is a positive-assurance engagement under International Standards on Auditing (UK). The auditor designs and performs substantive and controls testing to issue an opinion that the accounts give a true and fair view of the charity financial position.

In practice this means: detailed transaction sampling, verification of income recognition (especially restricted income), confirmation of bank balances and significant receivables, attendance at material stock or asset counts, and a review of accounting estimates and judgements. The work takes longer and costs more because the assurance level is higher.

The cost gap: be ready for it

In 2026 fee ranges, an independent examination for a charity between 100,000 and 500,000 pounds gross income typically costs 750 to 2,500 pounds. A statutory audit for a charity of 1,000,000 to 3,000,000 pounds typically starts at 5,000 to 8,000 pounds and scales with complexity. The step up from examination to audit therefore often doubles or triples the assurance cost.

That is one reason trustees of charities sitting at 800,000 to 1,000,000 pounds gross income should plan deliberately for the threshold crossing: have audit-ready records, choose an auditor early, and budget for the increase.

Choosing the right firm or examiner

For independent examination

Look for charity-sector experience, ACIE membership or equivalent, and a clear scope letter that specifies SORP compliance review where the charity prepares accruals accounts. Avoid examiners whose practice is largely small-company audit with no charity work; the SORP and restricted-fund rules trip up generalists.

For statutory audit

Look for a firm with a dedicated charity team, evidence of CCEW or OSCR-specific training, and a transparent fee model. Mid-tier firms with strong charity practices (Buzzacott, Saffery, Crowe, BDO charities team, RSM) usually deliver better value than a generalist mid-tier audit with no sector specialism. Big Four audit is rarely the right answer for a charity under 25 million pounds turnover.

Timetable: work backwards from the filing deadline

Filing with the Charity Commission is due 10 months after the year-end (and 9 months for charitable companies filing at Companies House). A typical audit cycle needs three to four months from year-end to signed accounts. A typical examination needs six to ten weeks. Both processes need clean, complete records at year-end, which is usually the binding constraint, not the examiner or auditor capacity.

The trustees who get the cheapest, smoothest audit or examination are not the ones who pick the cheapest firm. They are the ones who deliver clean records on day one of the fieldwork.

A short decision checklist for the board

1. Calculate gross income and gross assets for the year.
2. Check the governing document and funder agreements for any audit requirement below the statutory threshold.
3. If a charitable company, check Companies Act audit thresholds in parallel.
4. Confirm which examiner qualification level applies, if examination is the chosen route.
5. Get two or three quotes from sector-experienced firms before appointment.
6. Agree the timetable, deliverables, and trustee sign-off date in the engagement letter.

Independent examination and statutory audit are different products for different sizes and risk profiles of charity. The wrong choice (audit when only examination is needed, or examination when an audit is required) costs the charity money or compliance standing. Make the decision deliberately, document the reasoning, and revisit it each year as income moves.

Related reading: Charity Insurance Explained: What You Need and What You Do Not, Restricted Funds Accounting Without Headaches and Charity SORP 2026: What Changed And What It Means.