Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Primer for CPAs on testing the functional allocation

leave a comment »

I discuss the e-book Lies, White Lies, and Accounting Practices; Why nonprofit overhead doesn’t mean what you think it means by Saundra Schimmelpfennig at my other blog, Nonprofit Update.

If you are a CPA working with NPOs, check out my description of the book in my post, Q: Are overhead ratios the perfect measure of NPO efficiency and effectiveness?   You ought to get the book.

I suggest you buy a copy of the book for all of your staff who work with NPOs. Would be a cheap and fast way to provide some education on testing the functional allocation.

For experienced staff, it would be a good reminder of the games that can be played. Would remind experienced people why the functional allocation must be tested.

For your new staff, this is a superb introduction to places where the functional allocation can be misstated. Would illustrate why it is important to test the functional allocation, ask serious questions, and be skeptical of responses.  The functional area involves lots of difficult judgment calls by management and is difficult to test.

By the way, since some donors consider the overhead ratio the most important information in the financial statements, that makes the functional allocation material.

The book is a short read, has great information, and is available at astoundingly reasonable prices when compared to what we CPAs usually pay for training materials.

Written by Jim Ulvog

February 10, 2012, 7:13 am at 7:13 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: