Nonprofit Audits
 

The objectives of financial reporting for nonprofit organizations are to provide information to current and potential resource providers and others in assessing (a) the services a nonprofit organization provides and its ability to provide those services and (b) how management has discharged its stewardship responsibilities, as well as providing information about (c) the organization’s economic resources, obligations, and net resources and (d) the effects of transactions, events, and circumstances that change those resources (that is the organization’s performance or service efforts and accomplishments). More specifically, nonprofit financial reporting objectives are to:

  • Communicate the methods resources have been used to meet the organization’s objectives and external requirements
  • Identify an organization’s principal programs and their costs
  • Ddisclose the degree of control exercised by donors and funding sources over use of resources
  • Help the user evaluate the organization’s ability to carry out its fiscal objectives
  • Provide relevant information to meet the common interests of donors, members, creditors, and others who provide resources to not-for-profit organizations

Groups that are particularly interested in the financial information of a nonprofit organization include:

  • Funding sources and contributors to the organization
  • Regulatory agencies
  • Governing boards (board of trustees or directors)
  • Beneficiaries of the services rendered by the organization
  • Employees
  • Creditors and potential creditors
  • Constituent organizations: for example, a local chapter of a national organization

Client references available upon request

Links of Interest Nonprofits:

Internet Nonprofit Center
Information for and about Nonprofits
http://www.nonprofits.org/

Internal Revenue Service
http://www.irs.ustreas.gov

Forms and instructions
http://www.irs.gov/formspubs/index.html

State of Michigan - Attorney General
License to Solicit - information and forms
http://www.ag.state.mi.us/

Audits
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