Thousands of small charities in England and Wales will no longer be required to get an annual audit after an income threshold increase.
The government said it will increase the income threshold for charity audits from £500,000 to £1m.
The increase for the audit and "preparation" of group accounts (both to £1m), taken after a consultation, will make financial regulation of charities more proportionate, saving charities time and money, the government said.
Charities that are exempt from audits will still receive an "appropriate amount of the scrutiny", the Cabinet Office said.
But ICAS said increasing the audit threshold for accounting periods ending on or after March 31 may increase fraud and poor governance in charities.
"Charities are major providers of public services and therefore the increase in the audit threshold seems out of step with the changes," it said.
It also said that the Cabinet Office may have over-estimated potential savings to charities by increasing the audit threshold.