What is an IE?

Definition

Independent Examination (IE) is an alternative to a statutory audit for smaller charities - a legally acceptable form of external scrutiny of their end of year accounts. The definitions of ‘smaller’ vary in different parts of the UK (see below).

Which charities are eligible for Independent Examination?

  • Registered charities
  • Excepted charities (often churches or scout or guide organisations)
  • Many charities which are also registered as companies became eligible for IE for year-ends from 31 March 2009 onwards (see below)
  • Charities whose governing documents/constitutions do not specify an ‘audit’ 
    (NB: constitutions can be amended if this is the only stumbling block)
  • Charities where there is not a donor or funder who requires an ‘audit’ 
    (NB: if they do require an ‘audit’, it may be worth negotiating with the donor/funder)
  • Charities that are ‘smaller’ (see below for detailed definitions)

Definitions of ‘smaller’ charities

In England and Wales

Charities with (a) annual income not exceeding £1,000,000; and (b) gross assets not exceeding £3,260,000, must have an independent examination (unless an audit is required for some other reason).

Note: Charities with an income not exceeding £25,000 are not required by law to have an Independent Examination, but may elect to do so.

Click here to download our thresholds charts for England & Wales

In Scotland

Charities with (a) annual income of less than £500,000; and (b) gross assets not exceeding £3,260,000 must have an Independent Examination (unless an audit is required for some other reason).

Click here to download our thresholds charts for Scotland

In Northern Ireland

At present the regulations in Northern Ireland only apply once charities have registered with the Charity Commission Northern Ireland. 

For accounting periods beginning on or after 1st January 2016, charities with an annual income of less than £500,000 must have an independent Examination, unless an audit is required by the governing document, another enactment, a funder, or for any other reason.

Click here to access threshold guidance for Northern Ireland

What are the differences between Audit and Independent Examination?

An audit can only be conducted by a registered auditor or audit firm. The other major differences lie in the level of scrutiny and the nature of the report:

  • an independent examiner does not scrutinise a charity’s accounts to the same level as an audit (although the Charity Commission’s Directions still take the examiner through a 12-stage process and there is 6 step Guidance in Scotland);
  • an independent examiner writes a report which gives negative assurance (‘no matter has come to my attention …’) rather than positive assurance (a ‘true and fair’ view).

Benefits of Independent Examination?

An IE is less work than an audit for all concerned, therefore, it should be cheaper, allowing charities to spend more time/money on good causes rather than on scrutiny. (NB: An eligible charity can opt for an audit rather than an IE - but its Trustees should be able to justify that choice, particularly bearing in mind the extra expense incurred.)


Telephone: 01524 34892        Email: info@acie.org.uk        Address: The Gatehouse, White Cross, South Road, Lancaster  LA1 4XQ 

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