The Charity Statement of Recommended Practice (SORP) reform has moved into its next stage after launching the engagement process, it has been revealed.
The milestone comes after a major governance review of the Charity SORP in 2018/19 concluded that the accounting rules – which govern charity financial reporting and accounting for charitable companies and larger charities with an income of £250,000 and more – are no longer fit for purpose.
According to the latest update, convenors – who give key oversight into each area of the Charity SORP – have now been selected to regulate the engagement process. During this stage, volunteer engagement partners, who have a particular interest in or knowledge of specific areas of the SORP, are recruited to consult on the reform.
The announcement marks a major step forward for the reform, which aims to make the charity accounting regime transparent and accountable.
Commenting on the milestone, Nigel Davies, Assistant Director of Accountancy Services at the Charity Commission for England and Wales, said: “It is heartening to see charities embracing leadership and responsibility for the wider sector by volunteering to act as convenors as part of our SORP engagement work.
“Enhancing the SORP will support charities deliver better financial reporting that meets the expectations of the public.”
The reform comes after the 2018/19 SORP review found that charity financial reporting “must pay more attention to the users of charity reports and accounts” and offer “greater simplification of financial reporting requirements for smaller charities, which comprise the vast majority of users of the SORP”.
It is believed the new SORP will take effect from January 2024.
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