Audit and Accounting Standards Updates Nonprofits Need to Know

 

In this ever changing landscape of rules and regulations, nonprofit organizations need to be especially aware of the changes that will guide their audits. Being prepared for an upcoming audit is the best way to ensure a smooth and successful process. Please see our brief overview of Audit and Accounting Standards updates nonprofits need to know.

1. SAS No. 115 Communicating Internal Control Matters Identified in an Audit
Provides guidance to auditors with respect to what should be communicated to management and those charged with governance in an organization. It requires the auditor to make communications, in writing, to management and those charged with governance regarding significant deficiencies and material weaknesses in internal controls that you note in your audits.

2. SAS No. 116 Interim Financial Information
To revise AU section 722 of AICPA Professional Standards to establish standards and provide guidance on the independent accountant’s professional responsibilities when the accountant undertakes an engagement to review interim financial information of a nonissuer when certain conditions are met.

3. SAS No. 117 Compliance Auditing
Establishes standards and provides guidance on performing and reporting on an audit of an entity’s compliance with applicable compliance requirements of a governmental audit requirement.

4. SAS No. 118 Other Information in Documents Containing Audited Financial Statements
This is effective for audits of financial statements for periods beginning on or after December 15, 2010. It establishes a number of presumptively mandatory requirements for the auditor to perform when a client provides additional information in documents containing audited financial statements.

5. SAS No. 119 Supplementary Information in Relation to the Financial Statements as a Whole
Requires additional documentation from auditors and procedures around supplementary information, using the same materiality level used during the financial statement audit. Effective for audits of financial statements for periods beginning on or after December 15, 2010.

6. SAS No. 120 Required Supplementary Information
Effective for audits of financial statements for periods beginning on or after December 15, 2010.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under Internal Revenue Service Code. The technical information here is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. For additional information, please contact our firm at info@templetonco.com or 561-798-9988.

 

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