![]() ![]() There are four types of reports that an auditor could issue: " Unqualified Opinion" (this is the type of audit you hope for) " Qualified Opinion" which signals that the auditors found one or two situations where the nonprofit is not following GAAP, or that the organization is following GAAP in most cases although perhaps not all, but overall there is not a material misstatement of any financial position(s) " Adverse Opinion" (which signals that the auditors found a material misstatement or that overall the organization is not conforming to GAAP) or a "Disclaimer of Opinion" report. ![]() 1. generally accepted auditing standards new principles professional#Audits rarely detect fraud, but auditors can provide nonprofits with information, tools, and strategies to better protect against such occurrences." Source: How independent audits and audit committees protect nonprofits (Nonprofit Law Blog) The Auditors' ReportįASB principles require the auditors to issue a report to the board of directors of the nonprofit expressing a professional opinion about the organization’s financial practices specifically, whether the financial statements: “fairly present the financial position of the organization” without any inaccuracies or material misrepresentations. " It is a common misconception that audits serve primarily to uncover fraudulent activities, like embezzlement.
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