During June 2019, the panel set up to review the future development of charity reporting and accounting published recommendations on the governance and future direction of the Charities SORP and how it should be developed.
This governance review was overseen by Professor Gareth Morgan, an independent Chair, and undertaken by an oversight panel with a representative from each of the four charity regulators and an observer representative nominated by the Financial Reporting Council.
In brief, the recommendations arising from the report are that:
- Wider engagement is required with the public and beneficiaries and greater simplification of reporting requirements is needed for smaller charities.
- The SORP Committee should be retained, but reforms are needed regarding size, composition and clarification of the respective roles of the SORP-making body and SORP Committee.
- Broader and ongoing engagement is needed with a much wider group of stakeholders if the SORP is to continue to be fit for purpose.
- The sector and charity regulators should collaborate to identify and codify best practice in non-statutory financial reporting.
- The SORP-making body, supported by the Financial Reporting Council (FRC) needs to ensure that the redesigned SORP development process takes effect.
- The charity regulators are asked to ensure that the SORP process is adequately resourced in order to implement these recommendations.
We will continue to update our readers on the impact of these recommendations as these have now been submitted to the charity regulators in the UK and the Republic of Ireland for their consideration and comment.
Kenneth McDowell, Partner