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| ACCOUNTING
LIABILITIES UNDER REVIEW FOR CHARITY SECTOR |
12/03/04 |
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The
Charity Finance Directors’ Group (CFDG) has urged the government to consider
the perspective of charities in their plans to reform director and auditor
liability.
CFDG’s response to the New Labour consultation, which was developed in partnership
with its Policy Development Working Group, reminds the government that any
reforms could potentially have a huge impact on charities.
Charities are subject to very different audit and governance rules and therefore
often face their own separate issues.
In the response CFDG states that, on balance, auditors should be allowed
to limit their liability contractually, subject to rules set by the Secretary
of State.
However, it urges the government to recognise that, if charities are forced
to negotiate, they would be in a weaker position against auditors in the
majority of cases.
Auditors would therefore be able to dictate the terms of the agreement CFDG
also asked the government to consider the effect that liability has on the
recruitment of trustees and the rising cost of trustee indemnity insurance.
Shirley Scott, chief executive of CFDG, says: “The consultative document
addressed a number of issues that are relevant to charities and in relation
to the sections on auditing, specifically relevant to charity finance directors.
"It was especially important that CFDG responded to this consultation
as we represent an important and unique group of finance directors with
their own specific issues separate from those of for-profit companies.”
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