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Charity SORP compliance – findings of a research study

Paul Palmer (Head, Centre for Charity and Trust Research, South Bank University, London, UK)
Martin Isaacs (Formerly Research Assistant, Centre for Charity and Trust Research, South Bank University, London, UK, now Director of Finance, Crafts Council, London, UK)
Kenneth D’Silva (Senior Lecturer in Accountancy, South Bank University, London, UK)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 1 July 2001

2361

Abstract

This paper describes an empirical research study on the first year of compliance by a set of “major” UK charities with the Charity SORP that came into force in 1996 and replaced the previous SORP, which had been recommended since 1988. This new Charity SORP, unlike its predecessor is prescriptive and has the authority of the Charities (Accounts and Reports) Regulations 1995. From a sampling frame of top charities the accounts and financial statements of 125 major charities were selected for analysis (all of which were statutorily required to comply with the new SORP through the regulations). Additionally these top charities were selected as they were all subject to full professional audit, which should mean that the auditors would ensure compliance. Previous studies on charity accounts have recorded variations in accounting treatments. The new Charity SORP is mandatory for charities with an income of more than 250,000 and is designed to provide consistency in accounting by charities and a transparency to their affairs. The research found that there continues to be significant variation in the presentation of charity accounts and questions recent published research that claims significant improvements. The research also found that auditors, including those with charity expertise were failing in either advising or ensuring that charities complied with the SORP.

Keywords

Citation

Palmer, P., Isaacs, M. and D’Silva, K. (2001), "Charity SORP compliance – findings of a research study", Managerial Auditing Journal, Vol. 16 No. 5, pp. 255-262. https://doi.org/10.1108/02686900110392904

Publisher

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MCB UP Ltd

Copyright © 2001, MCB UP Limited

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