AUDIT OF THE FINANCIAL STATEMENTS (‘SMALL’ CHARITY LIMITED)
The purpose of this schedule to our engagement letter is to set out the basis on which we are to audit the financial statements of the charity and the respective areas of responsibility of the trustees and of ourselves.
1. YOUR RESPONSIBILITIES
1.1 As trustees of the charitable company, in addition to your general duties as specified in sections 170 to 177 of the Companies Act 2006, you are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and to enable you to ensure that the financial statements comply with the Companies Act 2006. You are also responsible for preparing financial statements which give a true and fair view and have been prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Companies Act 2006 and regulations made under it.
1.2 In preparing these financial statements, you are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation; and
• for large charitable companies only, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.
You also have a responsibility not to approve these financial statements unless you are satisfied that they give a true and fair view.