Kirk Rice Blog

Grant assurance – Independent Accountant’s Reports: what they are, who needs one, and why they matterWritten on January 16, 2026 by Kirk Rice LLP

Key points:

• Independent Accountant’s Reports (IARs) are often required by grant funders to confirm grant spend meets funding conditions, usually before payments or final claims are approved.
• An assurance engagement is an independent review of project costs against grant rules, budgets, timelines, and evidence requirements, helping reduce the risk of delayed or withdrawn funding.
• An IAR under ISAE (UK) 3000 is a focused assurance report on a specific grant or project, not the organisation’s full financial statements, showing funds were used as agreed.
• IAR requirements are set by the grant agreement, commonly at final claims or milestones, and differ from statutory or voluntary audits; Kirk Rice supports organisations with these reports under ISAE (UK) 3000.

Grants from UK and international funding bodies can play a significant role in supporting business growth, innovation, and development. However, funding rarely comes without conditions. Many grants require recipients to demonstrate how funds have been used, often before payments are released or final claims are approved.

One common requirement is an Independent Accountant’s Report (IAR) prepared under ISAE (UK) 3000 providing  assurance that grant expenditure meets the terms of the funding agreement.

What is an assurance engagement?

An assurance engagement is a formal review carried out by an independent accountant and registered auditor to check an organisation has spent the grant funds in compliance with the grant’s terms. In the context of grants, reports usually relate to project expenditure rather than a business’s full financial statements. Grant conditions often include:

• Detailed eligibility criteria for costs
• Defined project timelines and budgets
• Evidence requirements for claims and drawdowns

If these conditions are not met, funding might be delayed, reduced, or in some cases denied. Independent assurance aims to address this risk by providing an objective review of how grant funds have been applied and that public or third-party funds are being used as intended and in accordance with the agreed conditions.

What is an Independent Accountant’s Report (IAR) under ISAE (UK) 3000?

An Independent Accountant’s Report is a formal assurance report prepared in accordance with ISAE (UK) 3000, an international standard for assurance engagements other than audits or reviews of historical financial statements.

In simple terms, it shows the donor that grant funds have been spent as agreed in the grant rules.

The report focuses only on the specific project or claim being reviewed, not the organisation’s wider financial position.

When is an Independent Accountant’s Report (IAR) required for a grant?

The timing and scope of an IAR are set out in the grant agreement. Common trigger points include:

• Submission of a final project claim
• Milestone or stage-based drawdowns

The requirement is not linked to company size, but to the conditions imposed by the funder. Understanding these requirements early can help avoid delays later in the process. Eligibility for grants can be withdrawn if deadlines are not met for submitting IARs.

Reasonable assurance engagements, voluntary audits, and statutory audits: what’s the difference?

Sometimes these terms can be confused, but they serve different purposes:

Statutory audit
A legally required annual audit of a company’s financial statements, providing reasonable assurance that the accounts show a true and fair view for stakeholders such as shareholders and regulators.

Voluntary audit
An audit carried out by choice rather than legal requirement, often requested by lenders, investors, or shareholders.

Independent Accountant’s Report (IAR)
A targeted assurance engagement focused on a specific grant or project. It reviews defined costs against grant rules rather than the business as a whole.

Understanding this distinction helps ensure the correct type of report is commissioned.

Why choose Kirk Rice for an Independent Accountant’s Report?

Kirk Rice has experience supporting organisations that require Independent Accountant’s Reports under ISAE (UK) 3000. We understand the practical pressures that often accompany grant reporting and funding deadlines. Our approach begins with agreeing a clear scope of work, aligned with the grant conditions and the funder’s expectations.

We focus on explaining the work performed and conclusions reached in a language you understand. This helps organisations meet donor requirements with clarity and without unnecessary disruption to day-to-day operations.

Early advice can help ensure reporting expectations are clear before claims are submitted. If you would like to discuss an Independent Accountant’s Report, get in touch: info@kirkrice.co.uk

Please note: This article is correct as at the publication date. The answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made. The information is based on current tax legislation which may change in future. Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of relief from taxation are subject to change. The Financial Conduct Authority does not regulate tax planning.