Charities SORP-making body expanded to promote high quality financial reporting across UK and Ireland
Northern Ireland and Republic of Ireland regulators to be included in new charity sector SORP-making body.
The four charity regulators of the UK and Ireland will for the first time work together to develop the charity accounting framework for use across all four charity law jurisdictions.
The Financial Reporting Council (FRC) has approved the addition of the Charity Commission for Northern Ireland and the Charities Regulatory Authority for the Republic of Ireland as joint members of the SORP-making body with the Charity Commission for England and Wales (CCEW) and the Scottish Charity Regulator (OSCR). The inclusion of the Charities Regulatory Authority is subject to the SORP being formally adopted by way of regulations for use in the Republic of Ireland.
Statements of Recommended Practice (SORPs) are sector-driven recommendations on financial reporting, auditing practices and actuarial practices for specialised sectors. The FRC’s decision recognises that the charity regulators have agreed to jointly develop a sector-specific framework for accounting and reporting by charities in accordance with the Policy on developing SORPs.
The enlarged SORP-making body will work towards a new charities SORP building on the foundation of the existing SORP to promote a common approach to high quality reporting by charities whilst respecting local differences and legal requirements.
The regulators will begin developing the new SORP from January 2019.
Frances McCandless, Chief Executive of The Charity Commission for Northern Ireland, said: “This renewed partnership will allow us to work closely together to create a high quality reporting and accounting framework for charities that can command the confidence of donors and funders across the UK and Ireland.”
John Farrelly, Chief Executive of the Charities Regulatory Authority for the Republic of Ireland, said: “We welcome this step and are confident that this collaboration will result in an effective common reporting and accounting framework suitable for all four jurisdictions that also respects the unique reporting requirements for both Ireland and the UK.”
David Robb, Chief Executive of OSCR, said: “The charities SORP has a long history and we look forward to working together to ensure high quality, proportionate reporting and accounting which is crucial in order for charities to demonstrate that they operate transparently and can be trusted in the eyes of the public.”
Helen Stephenson, Chief Executive of CCEW, said: “We know from our research and case work that the public care deeply about how charities operate. I hope that this will equip us all to help charities rise to the challenge of addressing public concern and explaining their impact through accurate and meaningful reporting. There remains much to be done here and the SORP has a key role to play”
Notes to Editors
1. The existing charity SORPs (Statements of Recommended Practice) have been set by the Charity Commission for England and Wales and the Scottish Charity Regulator (OSCR). The SORP-making body is responsible for overseeing the SORP and publishing it.
2. Since 2010 both the Charity Commission (Northern Ireland) and the Charities Regulatory Authority had been observer members on the advisory charities SORP Committee.
3. The inclusion of the Charities Regulatory Authority as a member of the SORP-making body is subject to regulations being made under the Charities Act 2009 which require that accounts over a certain threshold prepared on a ‘true and fair’ basis follow the SORP. Until that time the SORP is voluntary in the Republic and the Charities Regulatory Authority will continue as an observer member of the advisory SORP Committee.
4. The Financial Reporting Standard applicable to the UK and Republic of Ireland (FRS 102) is applicable to accounts prepared to give a true and fair view in the UK and Ireland. Whilst this remains the case the FRC oversees the SORP which provides guidance to charities in the UK and Ireland as to how to apply FRS 102 when preparing charity accounts.
5. For more information about the SORP, the SORP-making body and advisory SORP Committee refer to the dedicated website www.charitysorp.org