SORP expected to be greatly improved following review

7 Jun 19

The body for ensuring transparency and accountability in charities’ financial accounts will be “considerably more effective” under new proposals, a review panel has said.

A review of the Charities Statement of Recommended Practice and Accounting (SORP) has been urged by a review panel to pay more attention to those who use charity annual reports.

The Charities SORP Committee Governance Review said: “Profound changes are now needed in both the focus of reporting and wider engagement in the process for developing the SORP if the SORP is to continue to be fit for purpose and meet the needs of the key users of the trustees’ annual report and accounts.”

It said that charity financial reporting must pay more attention to stakeholders that represent the public and beneficiaries’ interests and those who pay into the charity sector.

The report also recommended simplifying financial reporting requirements for smaller charities suggesting a need for a “fresh focus” on the reporting needs of small charities.

It also recommended that the sector and charity regulators should collaborate to identify and codify best practice in non-statutory financial reporting.

Charities SORP Committee Governance Review Panel chair, Gareth Morgan, said: “As an academic and as a charity practitioner, I am aware of the strengths of the Charities SORP but I have also been aware of concerns expressed by some.

“Our consultation led to a wide range of really constructive suggestions, and I am confident that if the panel’s recommendations are implemented the SORP will be considerably more effective in future.”

In February CIPFA announced it will continue providing secretariat support for Charities SORP.

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