Assignment:
Imagine that you had to describe the NFP financialsto a friend who has studiedaccounting but who is not familiar with NFP accounting
Audit/preparer
1)What public accounting firm performed the audit of the entity's financial statements?
2)Who prepared the form 990.
3) What are the balance sheet dates of the 990 and audited financials. What date did the preparer/auditor sign the reports?
4)Does the form 990 have a schedule A.Does it identify the reason for the charity status? What is the reason?
Financials
1)On the audited financials, what "Program" accounted for the largest expense?Is this what you would have expected.
2)Does the organization have temporarily and permanently restricted net assets? What is the nature of these restrictions?
3) Where is this organization receiving most of its support?
4) What financial statements are included in the audit report.
5) What was the source of the accounting principals?
Ratios/performance
1)What is the program expense ratio of this organization? Program expense ratio = program service expenses/ total expenses.Calculate this number using both the audited financials and the form 990.Are the ratios different? Why?For most organizations this number should be at least 65%.
2)What are the proportion of resources being used for fundraising activities (fundraising expenses divided by total expenses)?
3)What are your thoughts on the financial condition of this organization? You can look at liquidity, size of its liabilities, where is the entity receiving its revenue and support, its access to other fiscal resources.
Other
1) Who do you think thesereports are created for?
2) What did you learn from the "Notes"of the financials?Look for and summarize key issues addressed in the "Notes" sectionof the NFP.
3) Check out the "Compensation of Officers" on the 990. Is this what you would have expected?
4) What statement (990 or audited financials) do you prefer to get information from?In other words, if a friend asked you to evaluate a not-for-profit, what would you pull up first, the 990 or the audited financials?
Attachment:- reference.rar