Call for charities to present more detailed accounts

There has been a call for more detailed accounting practices in the charities sector, with the profession’s umbrella body claiming it was “essential” in providing full transparency.

Following a string of controversies involving charities in recent years, the Association of Chartered Certified Accountants (ACCA) has said it is now time for the formal and compulsory introduction of the charity SORP, the statement of recommended (accounting) practice, which is already compulsory in the North and throughout the UK.

ACCA said accounting standards in Ireland simply show how much a charity has raised and how much was spent, which it said meant a severe lack of detail whereby a breakdown of revenue versus expenditure was not outlined and explained.

In contrast, a charity SORP is a list of additional disclosures that are made alongside the normal disclosures made by commercial companies.

A number of larger Irish charities have already implemented SORP and while ACCA admitted that SORP could be difficult to apply, it believed it was an essential step towards total transparency.

Liz Hughes, the ACCA head of Ireland and mainland Europe, said: “Extraordinary abuse of trust requires extraordinary restorative measures and the0 charity SORP is one such measure. Standard financial statements do not meet donors’ information needs as they often do not include enough detail.

“There can be divergence between what donors and senior management see as appropriate expenditure, particularly with regard to salaries.

“Ultimately, donors are unhappy and reputable charities are being tarred with the brush used for the errant ones.”