RE: Accountability in Reporting for Not-for-Profit and Government Entities
The purposes of the memorandum is to explain the how increased scrutiny and increased demand that not-for-profit and government entities accountability by public has influenced reporting by those organizations. There are various reasons that have resulted in increased demand for accountability. Firstly, the role of government entities and non-for-profit entities have increased over time. Consequently, the budgetary allocation of these organizations have been expanding yearly which creates a temptation to misappropriate some of the funds. There are always scandals involving not-for-profit and government entities that are reported in the media almost every day. Therefore, it heightens suspicion by the public thus creating a need for accountability. Secondly, increased education levels and availability of information enhances public awareness on their role as public watchdogs and that the monies spend by those organization is their money.
Reporting by the government agencies is governed by the Governmental Accounting Standards (GAS) and the Financial Accounting Standards (FAS). Those standards are constantly improved and new standards created based on recommendations of the public. The standards have also ensured that the reports are easier for people with limited accounting knowledge to understand them. The source of the funds, how they were spend and any balances should be clear from the reports. The reports have to be reviewed by an independent audit firms to ensure that the information provided is accurate and free from material misstatements.
Funders of non-for-profit entities also demand regular reports from organizations they funds regularly. There are no uniform standards for not-for-profit entities. The standards are often set out by the donor organizations. Organizations funded by multiple funders are required to provide reports according to the format required by each of the donor organizations.
References
Ebrahim, A. (2010). The Many Faces of Non-Profit Accountability. Havard Business School, 1-30. Retrieved from http://www.hbs.edu/faculty/Publication%20Files/10-069.pdf
McMillan, E. (2010). Not-for-Profit Accounting, Tax, and Reporting Requirements. New York: John Wiley & Sons. Retrieved from https://books.google.de/books?id=tUSoEixetrQC&printsec=frontcover&dq=Not-for-Profit+Accounting,+Tax,+and+Reporting+Requirements&hl=en&sa=X&ved=0ahUKEwis7M-qrLnKAhVI0hoKHdaOBGUQ6AEILTAA#v=onepage&q=Not-for-Profit%20Accounting%2C%20Tax%2C%20and%20Reporting%
