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Best Practices of Effective Audit Committees
Posted by Brendan Donovan on Fri, Aug 15, 2014 @ 09:08 AM

An effective audit committee can be your not-for-profit organization’s best friend, safeguarding its most valuable asset: its reputation. Audit committees are tasked with providing experience, oversight and direction. Well-run committees ensure that management implements and follows an effective system of internal controls, and that outside auditors objectively assess the organization’s financial reporting practices. Through these and related efforts, audit committees strengthen their organizations by protecting their integrity, financial health and long-term viability. 

As not-for-profits face increased scrutiny – from the IRS; local, state and federal government; and from donors – the pressure on today’s audit committees is extraordinary. Each member understands it is his or her responsibility not only to prepare accurate financial statements, demonstrate responsible financial management, maintain regulatory compliance and manage operating risks, but to protect the very essence of the organization.

Committee Composition 

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Topics: not-for-profit, audit, Brendan Donovan, Audit Committee

FASB Recommends Changes to Cash Flow Statements and Statements of Functional Expenses Reporting
Posted by Brendan Donovan on Thu, Feb 6, 2014 @ 04:45 PM

As part of the not-for-profit financial statement project in the fourth quarter of 2013, the Financial Accounting Standards Board (FASB) recommended changes in the reporting requirements for cash flow statements and the statement of functional expenses.

Cash Flow Statements

FASB tentatively decided to require not-for-profits (NFPs) to use the direct method when presenting cash flows from operating activities and removed the requirement to reconcile the change in net assets to net cash flows from operating activities (the indirect method). According to FASB, the direct method, which is already used to present cash flows from investing and financing activities, would “improve the usefulness of the Statement of Cash Flows (SoCF) by providing more meaningful information” to users of NFP financial statements.

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Topics: Brendan Donovan, FASB, Functional Expenses Reporting, Cash Flow Statement

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