What Is an Independent Examination? (And Does Your Charity Need One?)

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What Is an Independent Examination? (And Does Your Charity Need One?)

Updated 17/07/2025

If your charity has modest income but still wants to stay compliant with the Charity Commission, you may have heard of something called an "Independent Examination." It sounds technical, but it’s actually a much more accessible and cost-effective alternative to a full audit. In this article, we’ll explain what an Independent Examination is, who needs one, and how it helps your charity maintain financial transparency without unnecessary complexity.

What Is an Independent Examination?

An Independent Examination is a type of external financial review. It's carried out by someone who is independent of the charity and qualified to assess its accounts, but it does not involve the same level of scrutiny or testing as a full audit.

The goal is to ensure your charity's accounts are properly maintained and that the financial statements give a true and fair view of the charity's finances.

When Is It Required?

Your charity must have an Independent Examination if:

  • Your gross income is over £25,000 but below the audit threshold (£1 million), and

  • You are not required by your governing document or funders to have a full audit.

If your charity's income is below £25,000, you don’t need an Independent Examination unless your governing document says otherwise.

For incorporated charities or CIOs, slightly different thresholds and rules may apply.

Who Can Perform One?

An Independent Examiner must be competent and independent, but doesn’t need to be a registered auditor unless your charity’s income exceeds  250,000.

Qualified professionals include:

  • Chartered Accountants

  • Independent financial examiners

  • Bookkeepers with experience in charity accounting (for smaller charities)

At Clear Blue Sky Accountancy, we offer this service with full compliance to Charity Commission guidance.

What’s the Difference Between an Audit and an Independent Examination?

Feature Independent Examination Full Audit
Required for income over £25,000 £1 million (or if required by funders)
Depth of review Limited, checks for reasonableness In-depth testing and verification
Cost Lower Higher
Reported to Charity Commission Yes Yes
Qualification required Only if income > £250k Registered Auditor only

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Benefits of an Independent Examination

  • Cost-effective: Saves your charity money compared to a full audit

  • Simpler process: Less intrusive and faster to complete

  • Credibility: Boosts donor and stakeholder confidence

  • Compliance: Keeps your charity in good standing with the Charity Commission

When Should You Schedule It?

Ideally, schedule your Independent Examination after your financial year-end but well before your Charity Commission filing deadline.

Many charities aim to complete it within 3 to 6 months of year-end.

How We Can Help

At Clear Blue Sky Accountancy, we provide friendly, affordable Independent Examination services tailored to small and mid-sized charities. We'll walk you through the process, keep your reporting on track, and make sure your trustees understand the findings.

Ready to stay compliant without breaking the bank? Contact us today.

Disclaimer: This article is for general guidance only and should not be relied upon as professional advice without consulting us or a qualified accountant.

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