Charities SORP committee to be reformed
The Charities SORP-making body has set out plans to change the way that the charity accounting framework, the Statement of Recommended Practice (SORP)*, is developed so that it better meets the needs of users of charity reports and accounts.
This follows a nine-month government review of the process, which recommended that it must change in order to meet “new public expectations”.
Criticisms of the existing system included:
- Slow to reflect wider changes to FRS 102 accounting rules
- Failure to strengthen charities’ weak controls over anti money laundering and cross-border financial oversight
- Complexity of reporting for smaller charities
- A lack of public confidence in the overall charity sector following some well-publicised scandals
The changes that have been announced include:
- The SORP-setting committee will be reduced from 16 to 12 members
- For the first time it will include corporate members who have a knowledge of charity accounts
- A new process will be introduced for developing the next SORP; this will include:
- Reforms to the SORP committee to ensure a stronger culture of constructive challenge, better stability and better representation of small charities and funders with an interest in the impact charities have
- A new engagement process, with seven stakeholder groups working in partnership with the SORP committee
The SORP-making body is actively recruiting engagement partners, individuals or organisations, who and will be exploring governance, transparency, simplification (tiered reporting) and the reporting needs of smaller charities.
A new SORP committee will be set up with representation from the UK and Ireland to support this work. The new arrangements are due to be in place by March 2020.
For more information, or if you are interested or knowledgeable about charity financial reporting then visit the Charity SORP website.