What Does an Independent Examiner Actually Do?

For many charity trustees — especially those new to the role — the independent examination can feel like a mysterious process. Someone comes in, looks at the accounts, and produces a report. But what are they actually checking? What happens if they find something wrong? And what does their report actually mean?

This guide answers all of those questions in plain English, so you know exactly what to expect and how to get the most from the process.

An independent examiner is not there to catch you out. They are there to provide independent assurance that your charity's money has been properly accounted for - and help maintain public trust in the sector

The Independent Examiner's Legal Role

The independent examiner's role is set out in the Charities Act 2011 and detailed in Charity Commission guidance CC32. In summary, the examiner is appointed by the trustees to carry out an independent scrutiny of the charity's accounts — checking that they have been properly prepared and are consistent with the underlying financial records.

It is important to understand what the examiner is not doing. They are not:

• Expressing an opinion that the accounts give a true and fair view (that's the auditor's job)
• Verifying every single transaction independently
• Assessing whether the charity is making good financial decisions
• Acting as a financial adviser to the trustees

What they are doing is providing negative assurance — confirming that, based on their review, nothing has come to their attention to suggest the accounts are materially wrong.

What the Examiner Checks — Step by Step

Under CC32, the examiner must follow a set of mandatory Directions when carrying out an examination. Here is what that looks like in practice:

Step 1 — Confirming eligibility and independence

Before anything else, the examiner must confirm that the charity is eligible for an independent examination (rather than a statutory audit), and that they themselves have no conflict of interest that would prevent them from acting independently. They cannot be a trustee, employee, or someone with a close personal or financial connection to the charity.

Step 2 — Reviewing the accounting records

The examiner reviews the charity's accounting records — the cash book, bank statements, invoices, receipts, and any other supporting documents. They compare these records against the accounts to check for consistency. If transactions appear in the accounts that aren't reflected in the records, or vice versa, the examiner will raise a query.

Step 3 — Vouching a sample of transactions

The examiner selects a sample of transactions and checks them against third-party evidence — for example, confirming that a grant shown as income matches a remittance advice from the funder, or that an expenditure item is supported by a supplier invoice. This is not a check of every transaction, but a risk-based sample designed to give the examiner sufficient comfort.

Step 4 — Checking fund accounting

The examiner checks that income and expenditure have been correctly allocated between restricted and unrestricted funds. If a charity has received a restricted grant, the examiner will check that it has been spent in accordance with the donor's conditions and correctly shown in the accounts.

Step 5 — Reviewing bank reconciliations

Bank reconciliations are checked to confirm that the closing balances in the accounts agree with the charity's bank statements. Unreconciled differences are one of the most common issues raised at this stage.

Step 6 — Checking for related party transactions

The examiner checks whether any transactions have taken place between the charity and connected persons — trustees, employees, their family members, or organisations they control. If so, the examiner confirms these have been properly disclosed in the accounts.

Step 7 — Reviewing the trustees' annual report

The examiner checks that the trustees' annual report is consistent with the accounts and includes the disclosures required for the charity's income level under Charity Commission guidance CC15d.

Step 8 — Considering the charity's financial position

For charities preparing accruals accounts, the examiner must check that the trustees have considered the charity's financial circumstances and made an assessment of whether the charity is a going concern — able to continue operating for the foreseeable future.

What Happens If the Examiner Finds a Problem?

This is one of the most common questions trustees ask — and the answer is that it depends on the nature and severity of what the examiner finds.

Minor issues and recommendations

For small errors, inconsistencies, or areas of weakness, the examiner will typically raise these directly with the trustees — either during the examination or in a separate letter of recommendations alongside the formal report. This might include things like incomplete disclosures, minor reconciling items, or suggestions for improving record-keeping. The examiner has discretion to include these in their report or communicate them separately.

Qualified reports

If the examiner finds something more significant — an error in the accounts, a misallocation of funds, or information that prevents them from completing their review — they may issue a qualified report. This means their report includes a statement that they have reasonable cause to believe the accounts don't meet the required standards in a particular respect.

Reporting to the Charity Commission

In the most serious cases, the examiner has a statutory duty to report directly to the Charity Commission. This applies where they identify matters of material significance to the Commission's regulatory functions — such as evidence of fraud, serious mismanagement, significant unexplained losses, or serious breaches of the charity's objects. This is not something the examiner can choose to keep between themselves and the trustees.

A good independent examiner brings more than compliance - they bring a fresh pair of expert eyes. Many trustees find the examination process genuinely useful for spotting issues early and strengthening their financial governance

What Does the Examiner's Report Actually Mean?

At the end of the examination, the examiner issues a signed report addressed to the trustees. There are two possible outcomes:

An unqualified report

This is the normal outcome. It states that, based on the examiner's review, nothing has come to their attention to suggest the accounts have not been properly prepared or that they are inconsistent with the accounting records. In plain English: the accounts look right. This report is filed with the Charity Commission alongside the accounts and trustees' annual report.

A qualified report

This indicates that the examiner has found something that requires the trustees' — and potentially the Commission's — attention. A qualified report is not necessarily catastrophic, but it does need to be taken seriously and addressed before the accounts are filed.

What the Examiner Is Not Responsible For

It's worth being clear about the boundaries of the examiner's role. The trustees are responsible for the accounts — not the examiner. If errors are later discovered that the examiner missed, that is a matter of quality of examination, but the legal responsibility for the accuracy of the accounts remains with the trustees.

Similarly, the examiner is not responsible for ensuring the charity is financially well-managed, that it is pursuing the right activities, or that it is making good decisions. Their role is narrowly defined as external scrutiny of the accounts — no more, no less.

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