Who Makes Sure the Not-For-Profit Organization’s Financial Statements Conform with GAAP?
The answer may surprise the nonaccountant, but the fair presentation of a not-for-profit organization’s financial position and activities in its financial statements prepared in accordance with GAAP is the responsibility of the not-for-profit organization’s management. For those who would have guessed this responsibility was that of the not-for-profit organization’s independent auditor, a serious change in paradigm needs to be made. Independent auditors are hired to perform an audit and issue an opinion as to whether the financial statements prepared by management are presented in accordance with GAAP. Not-for-profit organizations often rely on the independent auditors to help them meet their responsibility for preparing financial statements. The common reason for doing this, particularly in smaller organizations, is that the not-for-profit organization may not have individuals with the technical expertise on staff to take full responsibility for preparing the financial statements. Whi
