Internal audit and risk

For anyone who thinks their reserves could be working harder. Many charities adopt a conservative attitude when it comes to reserves. Rather than viewing

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If the activities you are planning do not fall within the exemptions and the activities are not fulfilling the primary purpose of the charity,

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Primary purpose trading is trade carried out by a charity in the course of carrying out its main objects and is exempt from income

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Trading is the exchange of goods or services for a fee. For tax, the law does not specifically define trading, but case law has

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As the trading company is a separate legal entity it must register for VAT if its taxable supplies exceed the VAT registration threshold. Any

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Charities only retain tax relief if their income is spent on their charitable purposes and tax exemptions are not available for non-charitable expenditure. Non-charitable

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The Gift Aid distribution of profits from a trading subsidiary to the parent charity can only be made from distributable profits. This means that

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So that a subsidiary does not pay tax, it must shed its taxable profits by tax-effective transfer to the charity by Gift Aid. However,

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You can accept the risk; this may be after controls have been put in place to manage some risk, leaving a residual risk which

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The Institute of Internal Auditors has described the stages of risk maturity for organisations, with risk enabled as the top level. At this level,

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The main types of risks to consider are project, operational and strategic risks. These are different and require different documentation and management: Project risks

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Risk registers should draw together the key information for the highest priority risks: Clear identification of the risk Consequences of that risk becoming a

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The two contributing factors are likelihood and impact. A possible approach would be that likelihood be scored 1-5 from very unlikely, unlikely, possible, likely,

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Step 1 understand your funds, the split between restricted, unrestricted, endowment etc Step 2 review future income streams, identifying which streams are continuing into

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Free reserves are unrestricted funds available for spending. Because charities can raise funds that are restricted for specific uses, or have endowments or designated

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Charities might hold reserves for the following reasons: ● to fund working capital● to fund unexpected expenditure, for example when projects overrun or unplanned

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Organisations are required to: 1. be aware of who their related parties are 2. actively manage any transactions with them 3. disclose any related

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