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A charitable organization relies for its funding on donations from the general public, which is mainly in the form of cash collected in the streets

A charitable organization relies for its funding on donations from the general public, which is

mainly in the form of cash collected in the streets by volunteers and cheques sent by post to the

charity's head office. Wealthy individuals occasionally provide large donations, sometimes on

condition that the money is used for specific purpose.

The constitution of the charity specifies the purpose of the charity, and also states that no more

than 15% of the charity's income each year may be spent on administration costs.

Required

Identify the inherent risks for this charitable organization that an auditor of its financial

statements would need to consider.

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