How to Prepare Your Charity Accounts for Independent Examination

For many charity trustees and treasurers, preparing for an independent examination can feel daunting — particularly if it's your first time or you're working without a dedicated finance team. The good news is that with the right preparation, the process is straightforward, and a well-organised set of records makes a real difference to how smoothly the examination goes.

This guide walks you through exactly what to prepare, what your examiner will be looking for, and how to make the whole process as efficient as possible.

The most successful independent examinations are those where the charity has prepared thoroughly in advance. Good records don't just satisfy your examiner - they protect your trustees.

Understand What the Examiner Will Be Doing

Before you start preparing, it helps to understand what your independent examiner is actually looking for. Under CC32 — the Charity Commission's guidance for examiners — they are required to:

• Compare the accounts with the underlying accounting records
• Review a sample of transactions and check them against supporting documents such as invoices, receipts, and bank statements
• Check that income and expenditure are correctly classified and allocated to the right fund (restricted or unrestricted)
• Confirm that bank reconciliations have been completed correctly
• Review significant estimates and judgements made in preparing the accounts
• Check that the trustees' annual report is consistent with the accounts
• Confirm there are no conflicts of interest that should have been disclosed

The clearer and better organised your records are, the quicker and easier this process will be — for both you and the examiner.

The Documents You'll Need to Prepare

Your examiner will typically request a core set of documents before or at the start of the examination. While the exact list may vary slightly depending on the size and complexity of your charity, the following are almost universally required:

Financial records

• Draft annual accounts (income and expenditure or receipts and payments, depending on your accounting basis)
• Bank statements for all accounts covering the full financial year
• Bank reconciliation(s) at the year end
• Cash book or accounting software export showing all transactions
• Invoices, receipts, and supporting documents for a sample of transactions
• Payroll records if your charity employs staff

Governance documents

• Trustees' annual report (draft is fine at this stage)
• Minutes of trustee meetings from the financial year
• Your charity's governing document (constitution, trust deed, or memorandum and articles)
• Details of any related party transactions

Fund information

• A schedule of restricted funds showing opening balances, income, expenditure, and closing balances
• Any grant agreements or donor conditions relating to restricted income

Key Things to Get Right Before the Examination

Beyond gathering the right documents, there are several things trustees and treasurers can do to make the examination smoother and reduce the chance of queries or delays.

Reconcile your bank accounts

This is the most fundamental check. Your bank reconciliation should agree the balance in your accounting records to the balance on your bank statement at the year end. If there are unreconciled differences, resolve them before you send anything to your examiner.

Check your fund accounting

Mixing restricted and unrestricted funds is one of the most common issues examiners encounter. Make sure each income source is correctly allocated to the right fund, and that any restricted funds have been spent in accordance with the donor's intentions. If there are unspent restricted funds at the year end, they should be clearly shown as closing balances on a restricted funds schedule.

Complete your trustees' annual report

The examiner will check that the trustees' annual report is consistent with the accounts. Make sure it accurately describes the charity's activities during the year, references the financial position, and includes all required disclosures. Charity Commission guidance CC15d sets out what the report must contain depending on your income level.

Identify and disclose related party transactions

If any trustees, employees, or connected persons have had financial dealings with the charity during the year — including being paid for services, receiving loans, or supplying goods — these must be disclosed in the accounts. The examiner is specifically required to check for this under Direction 7 of CC32.

Agree a timeline with your examiner early

Don't leave the appointment to the last minute. Your examiner may be working with multiple charities, particularly if your year end falls at a common date like 31 December or 31 March. Agree a clear timeline for when you'll provide draft accounts, when the examination will take place, and when you need the final report — allowing enough time to file with the Charity Commission within the ten-month deadline from your year end.

Think of your independent examiner as a financial health check, not a test to pass. The better prepared you are, the more useful the process becomes for your whole organisation

After the Examination: Filing Your Accounts

Once your examiner has issued their signed report, you are responsible for filing your accounts and trustees' annual report with the Charity Commission — along with the independent examiner's report. This must be done within ten months of your financial year end.

The Charity Commission requires accounts to be uploaded in PDF format via their online annual return service. If your charity is also a charitable company, you'll need to file with Companies House as well.

While your examiner can file on your behalf if you ask them to, the trustees remain legally responsible for ensuring documents are submitted correctly and on time. Late filing can result in a formal warning from the Charity Commission, so build enough time into your planning to avoid this.

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