A guide to Independent Examinations

The Trust Board is elected to manage the affairs of the Trust on behalf of the members. The Annual Accounts are a report on the financial activities of your Trust provided for the members to assess how the Board have carried out their function in the last financial year. How much money was raised? How was this money spent? What assets – such as cash, or shares in the club – does the Trust have? How much money does it owe?

One of the guiding principles behind all Supporters’ Trusts is transparency. That means not just doing the right things, but being seen to be doing them. An independent person reviewing the accounts adds credence to the view that the Trust Board are being open in the manner that they are managing the Trust on behalf of the members.

This guidance document was written by Supporters Direct in 2010, but is still largely relevant today. One question that often comes up is whether an independent examiner needs to be a qualified accountant or not. The guidance on page 7 of the document helps to clarify this:

• Whilst examiners do not have to hold a professional accountancy qualification, the Trust Board Members must appoint a person suitable for the circumstances of the Trust.
• An understanding of accountancy principles and accounting standards will be needed and where possible a qualified accountant should be selected. The guidance also gives consideration to the criteria of independence when selecting an examiner. The prospective examiner should consider these guidelines prior to accepting appointment.
• An independent examiner is an independent person who is reasonably believed by the Trust Board to have the requisite ability and practical experience to carry out a competent examination of the accounts.

Our current advice to Trusts in Scotland is that most Trusts, if their Society Rules permit it, can carry out Independent Examinations rather than full audits. The SD guidance previously set a revenue threshold of £25,000 for this, but this is no longer a requirement for membership of SD Scotland. The only thresholds you should be aware of are those set by the Financial Conduct Authority (in paragraphs 7.29 to 7.34 of this document):

• The society’s aggregated assets must be less than £2.8m at the end of the financial year
• The society’s turnover must be less than £5.6m for the year
• You need to pass a resolution each year to disapply the audit requirement for the following year