The call comes after the Charities (Regulation and Administration) Act 2023, with relatively limited reforms, received Royal Assent earlier this month.

In an open letter addressed to Social Justice Secretary Shirley-Anne Somerville, ICAS called for the Scottish charity law audit threshold to be reassessed and the independent examination regime for Scottish charities to be strengthened.

ICAS chief executive, J Bruce Cartwright CA, said: “Increases to the company law audit threshold over many years has caused a fall in the number of accountancy firms being registered to undertake audit work. This continuing trend means there are fewer auditors available to take on audits, of not just companies, but other kinds of organisations, such as charities.

“Scottish charities have a significantly lower audit threshold than companies. For example, a company needs to have turnover of more than £10.2 million in a financial year before an audit is required, but a Scottish charity only needs to have gross income of £500,000 or more. The differential between these two thresholds only adds to the current challenges charities can face in finding an auditor.”

Mr Cartwright added: “While the last significant uplift in the company law audit threshold took place in 2016, regulatory changes to the audit environment have led to a rise in demand for audit skills in a tight labour market and an increase in audit fees.

“The result is a greater risk that some Scottish charities may not be able to find an auditor to do their statutory audit. To assist with this problem, the Scottish government should urgently review the charity audit threshold.

“We believe that it will also be necessary to strengthen the independent examination regime for Scottish charities by being more prescriptive about the work an independent examiner should undertake.”