Audited Financial Statements for Non Profit Organizations

Audited financial statements for non-profit organizations are used to provide financial accountability and accuracy to federal and state governments from which they receive funding from, constituents whom are dependent on their programs, as well as board members and other people with an interest in the organization. An independent Certified Public Accountant (CPA) will prepare audited financial statements using financial documents provided by the organization. These documents will include various financial documents such as cash flow, income statement and balance sheets. The CPA examines the documents which support figures within the financial statements, assesses the overall accounting principles used, and evaluates the overall financial statement presentation. From this information the CPA creates an audited financial statement.

Within the audited financial statement, the certified public accountant provides an opinion, either qualified or unqualified, about the nature of the financial documents. An unqualified opinion in an audited financial statement indicates that the CPA is in agreement with the methods used by the organization to prepare their financial documents. The audit is found to be accurate, complete and fairly presented to meet the requirements of the US Generally Accepted Accounting Principles (GAAP), Financial Accounting Standards Board (FASB), and Internal Revenue Service (IRS). The audit provides the CPA a reasonable basis for their opinion that the financial statements are free of material misstatements or false/missing information.

A qualified opinion indicates that the CPA is not in agreement with aspects of the financial statements and/or methods used to prepare their financial documents. A qualified opinion indicates that the CPA is not confident that the financial statements are correct or accurate.

Occasionally an opinion will not be given within an audited financial statement. This could be due to the fact that there were insignificant documents available to properly prepare the audit, or there were issues that need to be addressed before evaluating the accuracy of the financial documents. A lack of opinion usually indicates that an organization needs to improve their accounting practices so they can meet the requirements of the US GAAP, FASB, and IRS.



Source by Neil Rischall

Author: admin