THE RISK OF FRAUD RISES IN A RECESSION

Date Added: 08 July 2009

A bulletin has recently been issued by the Fraud Advisory Panel warning smaller businesses of the threat of fraud rising during a recession.

It advises that the threat is at its worst during hard times and the damage can be great. Dealing with the consequences of a fraud, however small, can absorb a lot of management time when they can least afford it.

Recession increases the chance of fraud being committed by perhaps previously honest people who may be under financial strain. Losses as a result of fraud will make cash flow problems worse at a time when they are already under pressure.

Fraud prevention is a key part of any survival strategy during an economic downturn. Further guidance can be found on the Panel's website www.fraudadvisorypanel.org.

NEW CHARITY THRESHOLDS

Date Added: 25 June 2009

Various legislation changes have recently affected charity thresholds, both in terms of audit or independent examination requirements and the basis on which accounts should be prepared. These changes have been complicated by the phased introduction of some aspects.

For financial years ending on or after 1 April 2009 the accruals accounting threshold has now increased to £250,000 (previously £100,000) and the audit exemption asset test threshold has changed to £3.26m, provided the revised income threshold of £250,000 has been exceeded.

However, there remains confusion as small charitable companies could be exempt from audit under the Companies Act 2006 but may still require an audit under the Charities Act 1993!

To illustrate the issues, take the example of a company charity with a 31 December year end date, minimal assets and income of £300,000 which does not require an audit under its constitution. This charity would have the following reporting requirements:

• 2007 year end - audit required
• 2008 year end - reporting accountant only required
• 2009 year end - independent examination by an appropriately qualified person allowed

For further guidance, please contact This e-mail address is being protected from spambots, you need JavaScript enabled to view it

CHARITIES - GOOD GOVERNANCE MAKES GOOD SENSE

Date Added: 25 June 2009

With the current economic climate impacting both on giving and the demands on charities directly, weathering the storm requires good governance, sound management and a keen eye on managing money and assets.

All charities should take appropriate action now to ensure they are best placed to tackle future threats via the following overview:

• Ensure you have an appropriate strategy in place to achieve your objectives in the current market;
• Review current risk assessments and revise as necessary;
• Ensure reserves policy is appropriate in light of the above two aspects;
• Ensure management information is detailed and accurate and produced on a timely basis to ensure an optimum reaction to any required changes.

If you would like advice or assistance on any of these issues, please contact This e-mail address is being protected from spambots, you need JavaScript enabled to view it

JUST WHEN YOU THOUGHT IT COULDN'T GET ANY WORSE ...

Date Added: 18 June 2009

While many businesses and individuals are currently struggling to cope with the credit crunch and need all the help they can get, problems at HMRC's security checking HQ in Bristol are causing severe delays for overdue tax repayments.

Stories in the press indicate that many taxpayers are experiencing severe delays in receiving tax repayments which, in some cases, is causing further cash flow problems for already cash-strapped businesses.

According to HMRC, the delays have been caused by a combination in a very much sharper peak of repayments in January and February arising from the move to greater online filing, plus more repayments being selected for security checks.

HMRC uses an automated risk based process to identify which repayments can be immediately released and selects those which require further manual checks. It says that the majority of repayments are released for payment but that there have been delays - some of these substantial - at the manual checking stage. HMRC is looking into how some of these checks could be automated in order to release the backlog and is reporting that by the end of April the majority of repayments requiring manual security checks were being dealt with in two to three weeks.

If you are due a repayment and it has not been received within a couple of weeks of being requested please let us know as it may need to be followed up with HMRC.