An accountancy body has called on the Scottish government to relieve pressures on charities by increasing the threshold for completing an audit.

Currently, charities with an annual income over £500,000 are required to complete an audit in Scotland, while the threshold is £1 million in England and Wales.

The income threshold has not been updated since legislation was introduced in Scotland in 2005.

The Association of Chartered Certified Accountants (ACCA) says the current threshold adds to costs faced by smaller charities, some of whom pay proportionately more for an audit compared to larger charities, an average 0.8% for those with a turnover under £1m compared with 0.4% for charities with an income above this level.

ACCA strategic engagement lead for Scotland, Susan Love, said: “While the public rightly expects high standards of governance and transparency, we have an opportunity to relieve some cost pressure from those charities currently subject to the rigour of the audit process.

“While these charities would still be subject to external scrutiny of their accounts via the Independent Examination process, a larger pool of professionally qualified accountants can provide this service, in comparison to an audit, where processes can take a lengthy period of time and specialist talent is required.

“Better and more up-to-date regulations will not only ease the burden on small grassroots charities, but it will ensure that their hard-earned fundraising will continue to go to the causes that need it most, freeing up time and money for charities to do their incredible work.”

SCVO head of policy and research, Kirsten Hogg, added: “Over the last few years we have increasingly heard from charities facing difficulty in accessing audit, due to a combination of rising costs and a decrease in firms offering charity audit services.

“At a time when charities are facing considerable financial challenges, and a lack of resources sees staff and volunteers under considerable pressure, these difficulties present a significant challenge.

“We welcome ACCA’s support for a review to better understand these issues, and to develop sensible solutions that work for both charities and the accountancy industry, while ensuring that charities continue to meet appropriately high standards of governance and regulation.”