Independent examination of accounts

5e.3.1.1 Appointment of Independent Examiner or auditor
At each AGM of the Group, District or County Scout Council an auditor or independent examiner, as appropriate, must be appointed. Each Group, District or County must decide if it needs an auditor or independent examiner by reference to the tables below. Information about the qualifications for the person scrutinising the accounts are also shown below.

Charity Trustees are encouraged, as a matter of best practice, to formalise their relationship with the independent examiner or auditor by setting out the services that are expected via a letter of appointment. This will enable both parties to understand and appreciate the extent of the work and duties involved in the independent examination process.

For Scouts members of the Federation, the letter of appointment may be achieved by exchange of emails. It should lay out briefly:

What the Independent Examiner or Auditor is being engaged to do
The date that has been jointly agreed that the examination of accounts will be complete

And include a link to the template for the examiner's report to the Trustees.

a) England and Wales

Gross income thresholds	Type of accounts	Minimum external scrutiny
£0 - £250,000²	Receipts and payments & Statement of Assets and Liabilities	An Independent Examiner (POR 5e.3.1.1(a.a))
£250,001 - £1 million¹	Accrual in accordance with the SORP	An Independent Examiner who is a member of a recognised professional body (POR 5e.3.1.1(a.b))
>£1 million¹	Accrual in accordance with the SORP	A registered Auditor (POR 5e.3.1.1(a.c))

There is more detail at the independent examination of charity accounts: guidance for trustees.

a. Qualifications: where gross income does not exceed £250,000¹

The Scout Council should appoint as an Independent Examiner³ an independent person that they reasonably believe possesses sufficient financial awareness, numeracy skills and relevant experience to carry out the work and make the judgements required.

The Charity Commission for England and Wales suggests that the examiner may work in a role that involves financial management, such as setting and managing budgets and reviewing financial reports, or that requires knowledge of accounting systems, such as maintaining financial records and internal controls.

To ensure no conflict of interest, person(s) appointed as an Independent Examiner⁴ must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

Note that if, despite the income not exceeding £250,000, accrual accounts are prepared voluntarily then the Charity Commission for England & Wales recommend that these are examined by an Independent Examiner who is a member of a recognised professional body (POR 5e.3.1.1(a.b) below).

The Scout Council may instead choose to appoint a Registered Auditor.

b. Qualifications: where the gross income in the year under review exceeds £250,000 but does not exceed £1 million¹

The Scout Council should normally appoint an Independent Examiner, who must be a member of one of the following bodies⁵:

Institute of Chartered Accountants in England & Wales
Institute of Chartered Accountants of Scotland
Institute of Chartered Accountants in Ireland
Association of Chartered Certified Accountants
Association of Authorised Public Accountants
Association of Accounting Technicians
Association of International Accountants
Chartered Institute of Management Accountants
Chartered Governance Institute of UK & Ireland
Chartered Institute of Public Finance and Accountancy
Association of Charity Independent Examiners
Institute of Financial Accountants
Certified Public Accountants Association

There is more detail available on gov.uk.

To ensure no conflict of interest, person(s) appointed as an Independent Examiner⁶ must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

Alternatively, the Scout Council may appoint a Registered Auditor (see POR 5e.3.1.1(a.c) below).

Important: a Registered Auditor must be appointed if the charity’s income exceeds £250,000 and its gross assets exceed £3.26 million.

c. Qualifications: when must a Registered Auditor be appointed?

The Scout Council must appoint a Registered Auditor if one of these conditions are true for the year under review:

the gross income exceeds £1 million
the gross income exceeds £250,000 and gross assets exceed £3.26 million

To ensure no conflict of interest, person(s) appointed as an Auditor must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

b) Scotland

Gross income thresholds	Type of accounts	Minimum external scrutiny
£0 - £250,000¹	Receipts and payments & Statement of Assets and Liabilities	An Independent Examiner (POR 5e.3.1.1(b.a))
£250,001 - £500,000¹	Accrual in accordance with the SORP	An Independent Examiner who is a member of a recognised professional body (POR 5e.3.1.1(b.b))
>£500,000¹	Accrual in accordance with the SORP	A registered Auditor (POR 5e.3.1.1(b.c))

These requirements apply to all Scottish Groups, Districts and Regions, whether or not they are registered with OSCR.

Whether or not the Group, District or Region is registered with OSCR, the auditor or independent examiner must carry out an external examination of the accounts in accordance with the requirements of the Charities and Trustee Investments (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the Charities (Regulation and Administration) (Scotland) Act 2023.

a. Qualifications: Where gross income in the year under review does not exceed £250,000¹

The Scout Council will normally appoint as an Independent Examiner an independent individual who is someone the Trustees consider is able to carry out an independent examination in line with the relevant requirements. The Trustees should satisfy themselves that the person appointed has the necessary knowledge and skills to be able to carry out the engagement, which may depend on the complexity of the Group, District or Region’s operations and accounts.

OSCR suggests that the types of people whom Trustees could consider as having the required skills and experience might include:

full or associate members of the Association of Charity Independent Examiners
qualified accountants currently in employment
retired accountants
other people familiar with financial matters who can demonstrate familiarity with the current reporting requirements for Scottish charities.

If accrual accounts are produced voluntarily, the requirements in POR 5e.3.1.1(b.b) below must be followed.

To ensure no conflict of interest, person(s) appointed as an Independent Examiner⁷ must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

Alternatively, the Scout Council may appoint a Registered Auditor.

It is a requirement to appoint a Registered Auditor if accrual accounts have been prepared and the gross assets exceed £3.26 million.

b. Qualifications: Where gross income in the year under review is more than £250,000 but does not exceed £500,000¹

The Scout Council will normally appoint an Independent Examiner who must be⁸:

a member of one of the following bodies:
- The Institute of Chartered Accountants of Scotland
- The Institute of Chartered Accountants in England & Wales
- Chartered Accountants Ireland
- The Association of Chartered Certified Accountants
- The Association of Authorised Public Accountants
- The Association of Accounting Technicians
- The Association of International Accountants
- The Chartered Institute of Management Accountants
- The Institute of Chartered Secretaries and Administrators
- The Chartered Institute of Public Finance and Accountancy
- The Institute of Financial Accountants

A full member of the Association of Charity Independent Examiners

the Auditor General for Scotland

a person appointed by the Accounts Commission for Scotland

To ensure no conflict of interest, person(s) appointed as an Independent Examiner⁹ must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

Alternatively, the Scout Council may appoint a Registered Auditor.

A Registered Auditor must be appointed if your gross assets exceed £3.26 million.

c. Qualifications: Where the gross income in the year under review exceeds £500,000¹

The Scout Council must appoint a Registered Auditor to carry out an audit.

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

c) Northern Ireland

Gross income thresholds	Type of accounts	Minimum external scrutiny
£0 - £250,000¹	Receipts and payments & Statement of Assets and Liabilities	An Independent Examiner (POR 5e.3.1.1(c.a))
£250,001 - £500,000¹	Accrual in accordance with the SORP	An Independent Examiner who is a member of a recognised professional body (POR 5e.3.1.1(c.b))
>£500,000¹	Accrual in accordance with the SORP	A registered Auditor (POR 5e.3.1.1(c.c))

Find out more detail at Accounting and reporting essentials

a. Qualifications: Where gross income in the year under review does not exceed £250,000¹

The Scout Council will normally appoint as an Independent Examiner an independent person whom they reasonably believe possesses the requisite ability and practical experience to carry out a competent examination of the accounts. The Charity Commission for Northern Ireland suggests that the key to a successful independent examination is in the examiner having the relevant skills and experience to undertake a competent examination and in all those involved having an understanding of:

the responsibilities of the examiner and the Trustees in relation to the scrutiny, preparation and filing of accounts
what an examination involves
who may undertake an examination.

Note that if, despite the income not exceeding £250,000, accrual accounts are prepared voluntarily then the Charity Commission for Northern Ireland suggests that Trustees consider appointing an Independent Examiner who is a member of a recognised professional body (see POR 5e.3.1.1(c.b) below.

To ensure no conflict of interest, person(s) appointed as an Independent Examiner¹⁰ must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

There is further information available from the Charity Commission for Northern Ireland.

Alternatively, the Scout Council may appoint a Registered Auditor.

b. Qualifications: Where gross income in the year under review is more than £250,000 but does not exceed £500,000¹

The Scout Council will normally appoint an Independent Examiner, who must be a member of one of the following bodies¹¹:

Institute of Chartered Accountants in England & Wales
Institute of Chartered Accountants of Scotland
Institute of Chartered Accountants in Ireland
Association of Chartered Certified Accountants
Association of Authorised Public Accountants
Association of Accounting Technicians
Association of International Accountants
Chartered Institute of Management Accountants
Institute of Chartered Secretaries and Administrators
Chartered Institute of Public Finance and Accountancy
Full Member of the Association of Charity Independent Examiners
Institute of Financial Accountants
The Certified Public Accountants Association

To ensure no conflict of interest, person(s) appointed as an Independent Examiner¹² must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

There is further information available from the Charity Commission for Northern Ireland.

Alternatively, the Scout Council may appoint a Registered Auditor.

c. Qualifications: Where the gross income in the year under review exceeds £500,000¹

The Scout Council must appoint a Registered Auditor to carry out an audit.

To ensure no conflict of interest, person(s) appointed as an Independent Examiner¹³ must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

There is further information available from the Charity Commission for Northern Ireland website.

d) Groups, Districts or Counties located outside the United Kingdom

All Scout Councils in the Channel Islands, the Isle of Man, the Groups and Districts of British Scouting Overseas and each of the five Overseas Territories must arrange for scrutiny of their accounts in line with the local guidance from their charity regulator (POR 5a.1.2).

Use the guidance from the appropriate charity regulator (POR 5a.1.2) for appointment of Independent Examiners or Auditors in the Channel Islands, the Isle of Man, British Scouting Overseas and each of the five Overseas Territories.

If the Scout unit’s charity regulator does not offer relevant guidance, the guidance for England (POR 5e.3.1.1(a)) must be followed.

To ensure no conflict of interest, person(s) appointed as an Independent Examiner¹⁴ must not hold any role in the individual Group, District, or County whose accounts they are scrutinising. Further, the appointed person should avoid any compromise on their independence by not being ‘connected’ to the Trustees (including ex officio Trustees) of the charity through:

a family relationship. For example, the parent or child of a Trustee
a financial or commercial relationship with a Trustee
a financial or commercial relationship with the Group, District, or County. For example, someone who represents a body that funds the or contracts with the charity to provide services.

5e.3.1.2 Report by the Independent Examiner or auditor
In countries other than Scotland, a report to the Trustee Board must be completed by the independent examiner or auditor in accordance with the requirements of the charity’s regulator (See POR 5a.1.1.2). Templates for reports by Independent Examiners are downloadable from Accounting and Reporting.

In Scotland, a report to the Trustee Board must be completed in accordance with one of the specimen accounts referred to in the Scouts Scotland Guidance as appropriate to an independent examiner or an auditor.