As a charity trustee, one question comes up time and again: should we have a charity audit?
And the answer is… maybe. Or maybe not.
It depends on the size of your charity, what the rules require, and what level of assurance you actually need. Let’s break it down.
When is a charity audit legally required?
Your charity is legally required to have a charity audit if it’s big enough. If it’s not, an independent examination is the required alternative. Understanding where you fall is kind of important.
Here’s a quick summary of the thresholds:
| Current rules | New rules (from 1 Oct 2026) | |
| Independent examination required | Turnover over £25,000 | Turnover over £40,000 |
| Audit required | Turnover over £1,000,000 | Turnover over £1,500,000 |
| Audit required (assets test) | Assets over £3,260,000 and income over £250,000 | Assets over £5,000,000 and income over £500,000 |
As you can see, the thresholds are increasing from October 2026, which means fewer charities will be legally required to have a full audit. This is good news for smaller charities concerned about costs!
For more detail on the current rules, see the Charity Commission’s guidance on independent examination.
But what if you want more assurance?
Just because your charity only requires an independent examination doesn’t mean you can’t choose to have a charity audit anyway.
An audit is more rigorous than an examination. For some charities – particularly those with complex operations, significant grant funding, or stakeholders who expect a higher level of scrutiny – it might be the right thing to do.
What’s important is understanding the cost (because the difference is significant).
Your three options
Independent examination
This is the entry-level option; a “light-touch” external review of your charity’s annual accounts. It’s designed as a cost-effective alternative to a full audit for smaller organisations.
An independent examiner provides what’s called “negative assurance”, essentially confirming that nothing has come to their attention to suggest the accounts are materially misstated or non-compliant.
It’s deliberately less intensive than an audit. Think of it as a simple check, not a deep dive.
Assurance review
An assurance review sits in the middle. It’s more thorough than an independent examination, but less than a full charity audit.
It involves agreed-upon procedures tailored to your charity’s specific concerns. Maybe you want extra comfort over grant expenditure, or a closer look at internal controls. The scope is flexible, and the cost reflects the work involved.
Think of it as a bespoke option when you need more than a light touch but don’t need (or can’t afford) the full works.
Statutory audit
A statutory audit is the most rigorous option; a full, independent examination of your charity’s financial records, accounting practices, and internal controls.
The purpose is to verify that your financial statements show a “true and fair” view of the charity’s financial position. It evaluates risks of material misstatement and provides the highest level of assurance to funders, donors, and stakeholders.
If your charity is above the thresholds, a charity audit is legally required. But even below them, you might choose one for credibility or because a major funder insists on it.
What about cost?
This is where trustees need to pay attention.
As a rough guide:
- Independent examinations are normally fairly inexpensive
- Assurance reviews are often double the cost of an examination (or more)
- Statutory audits can be 8 to 20 times as much as an examination
Those are big differences. So it’s important to understand what’s actually required and to get your budgeting ducks in a row before committing to one option or another.
If you’re a smaller charity and an independent examination meets your legal obligations, don’t feel pressured into paying for more than you need. But if your charity has complex finances or demanding stakeholders, the extra cost might be worth it.
Not every charity needs an audit
While every charity doesn’t necessarily need a charity audit, every charity needs to understand its obligations and make a conscious decision about the right level of scrutiny.
Need help with your charity’s accounts, whether that’s an independent examination, assurance review, or full audit? Get in touch! We work with charities of all sizes.
