Understand and apply the requirements of FASB and AICPA pronouncements to your not-for-profit clients. Consider real-world financial statements, cases and problems faced by CPAs with not-for-profit clients and by executives of not-for-profit organizations.
Objectives:
Prerequisite: Experience in the not-for-profit environment
VALUE AID! Not-for-Profit Organizations AICPA Audit and Accounting Guide and the AICPA’s Checklists and Illustrative Financial Statements for Not-for-Profit Organizations
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Case 1 - Sources of GAAP – The Theater
Learning Objectives
To recognize characteristics that separate not-for-profit organizations from businesses.
Also, to help you identify sources of generally accepted accounting principles (GAAP) applicable to not-for-profit organizations.
[Before tackling this case, consider the Audit Guide (Guide) page v, the Preface, and Chapter 1, including Appendix G to Chapter 1. Note. The references used in this course are to the May 1, 2007, Not-for-Profit Organizations Audit and Accounting Guide as this was the Guide in place as the course was written.]
FactsYou are a practicing CPA with many business clients but little familiarity with not-for-profit organizations. You have been approached by the treasurer of the local theater, a not-for-profit organization. The treasurer explains that the theater is preparing an application for a state grant. The application calls for financial statements prepared in accordance with generally accepted accounting principles. The statements will be for the year ending June 30, 2008. "Will you help me with these statements?" asks the treasurer.
QuestionAssume that you say you will help the treasurer. Where will you turn for information on Generally Accepted Accounting Principles (GAAP) for not-for-profit theater groups?
For self study participants only, the CPE Standards require the inclusion of review questions that provide periodic learning feedback. Please go to the review section at the end of the course to access the review questions for this chapter.
Case 2 - Rotary Luncheon – The Big Picture Learning Objectives
To introduce basic financial statements for not-for-profit organizations. Also, to review the major features of accounting and reporting for not-for-profit organizations. (Before tackling this case, consider Chapter 3 of the Guide.)
FactsThe setting is a table during lunch at a local Rotary meeting.
You are the CPA, Jane. Seated at the table with you are Nate, an auto dealer; Ann, owner of a dress shop; and Jack, president of a local bank. A conversation begins. Nate: Jane, what are you up to now that the tax season is over? Jane: Some of the heat is off. But now I'm catching up on my work with my not-for-profit
clients. Some of the rules for accounting for not-for-profits are unique, and some auditing problems are different. Ann: Are the books kept differently? What are the differences?
Jane: Payroll's the same. And they pay bills when due. And the books are not very different. Jack: Well, what's it all about, Jane? We're not familiar with accounting for not-for-profits. What is it like?
RequiredWithout boring your neighbors at the table, but recognizing that they are fairly sophisticated about finance and business, present a brief answer, based on the information in Chapter 3 of the Guide. Emphasize a few major points.
Case 3 - Practice Concerns
Learning Objective
To alert you to five special concerns when a CPA works on not-for-profit clients' statements.
(Before tackling this case, consider the following paragraphs in the Guide: 3.20, 3.21, 14.04, 14.05, 3.05, 3.10, 3.18, 3.12, 3.13, and 13.41 to 13.55.)
RequiredRespond to the following concerns about accounting for not-for-profits.
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