Regulation of Not-for-profit Companies in Australia

|4 business organisations and their |Purpose |Profit free, not for profit, at |Size and scale |Linking the ownership to the size and |

According to our text, “Not-for-profit organizations lack a residual ownership claim and the organization’s purpose is something other than to provide goods and services at a profit.” “Because significant resources are provided to governments and not-for-profit organizations, financial reporting by these organizations is important.” (Page 2).

SFAC No. 8 addresses the cost constraint on useful financial reporting, “Cost is a pervasive constraint that standard setters, as well as providers and users of financial information, should keep in mind when considering the benefits of a financial reporting requirement.” (SFAC No. 8 BC 3.47) However, the ability to place a dollar value and fully enumerate a cost or benefit is almost an impossible task for standard-setters. Additionally, there is no way to successfully identify and measure all of the economic consequences associated with a new standard. The FASB should be applauded though for advancing uniformity in accounting standards, however; uniform financial reporting suggests a one size fits all approach. “Smaller, non-publicly listed firms (and their auditors) argue that accounting standards are formulated mainly for larger, publicly traded firms” and that “compliance costs are disproportionately higher and the

Section 404 of the Act (Charities Act 2006) requires annual reports to contain an internal control (IC) reports emphasising the responsibility of management for establishing and maintaining adequate IC over financial reporting. In addition, the annual reports should contain an assessment of the effectiveness of the IC over financial reporting. It is a requirement to aid external auditors to report on this assessment, having carried out independent testing of the control system. Appendix 4 (Table 4 and 4.1) summarises the existing charity reporting and accounting requirements set out by the CC. Appendix 7 in a Flowchart: Eligibility requirements for independent examination. The Tables consist of details of the charity size and the reporting requirements for the filing of its annual accounts and reports. If adhered to by the various charities in their respective group will help in improving reporting within the sector.

The main purpose of this report is to evaluate the organizational structure and adopted working methods of a non- profit (charity) firm all over Australia. I have selected “Aboriginal & Torres Strait Islander Legal Service (QLD) LTD” as an example to elaborate the organizational structure and

This essay analyses the financial statements of the RSPCA and Rolls Royce Group plc. The analysis reviews important information derived from their statements and discusses the implications for performance measurements. This analysis also discusses financial statement differences between charity and for-profit companies, as well as considers what additional information would facilitate financial analysis.

Not for profit organisations consist of organisations that are not run for the profit or personal gain of individual/s. They are often referred to as charities and provide benefit services to society, often encouraging people to band together by sharing resources to achieve a common goal. Profits can be obtained by these organisations but must applied for the organisations purposes. These organisations include Surf life-saving, Churches, and Salvation Army etc. (Sessoms, 2014).

Stakeholders play a critical role in the management and decision-making process of an organization. An example of a stakeholder includes employees, managers, patients, vendors, suppliers, the community, creditors, customers and the government (Daft, 2013). Also, Daft (2013) says, “Stakeholders are groups “within or outside of the organization that has a stake in the organization’s performance” (p. 23). There are a few differences surrounding stakeholder expectations between non-profit and for-profit organizations. The differences in nonprofit organizations and for-profit business organizations are the direction of activities for the end goal (Daft, 2013). Although it is very difficult to measure the impact that a nonprofit has on society, community, or a particular group as opposed to evaluating an income statement from a for-pro-profit organization. The same level of attention should be paid to stakeholder for nonprofit organizations as stakeholders of for-profit organizations.

This paper will examine budgeting procedures for profit and non-profit businesses and compare similarities, and if they exist, differences in accounting practices. This paper will also attempt to review what is Generally Accepted Accounting Procedures (GAAP) for budgeting for any organization to be successful.

Reporting financials and meeting consistence regulations are different parts of good administration. I need to stress here that it is so imperative to be straightforward and open with data as not-for-profits go under normal investigation on money related matters. So board preparing is

A not for profit organization is a corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive (Legal, 2013).” There are immense community benefits as a not-for-profit generally accepts everyone regardless of ability to pay. Nonprofit organizations are granted tax-exempt status which helps them to provide services to the public and are expected to be effective managers of their finances as well as being efficient (Financial Management, 2010). In doing so, they can gain exemptions from federal and state incomes taxes and have the ability to solicit tax-deductible contributions (Financial Management, 2010). Organization must follow legal financial

In England and Wales charity accounts are regulated by the following acts; Charity Act 1993, Charities (Accounts and Reports) regulations 1995 and 2000, Charity act 2011, Charities SORP (Statement Of Recommended Practice) and by the body of Charity Commission Directions and Guidance. The charity accounting framework in UK, is the SORP 2005 that was up to dated, in 2015, and it is compulsory, which means is required by law, furthermore, there are two accounting stands, F. R. S. S. E. only for small entities with a turnover not more than £ 632’000 balance sheet of £ 316’000 (value of the assets) or less and with a max of 10 employees (financial reporting standard for smaller entities, last up to dated - 2015) and F.R.S. 102, (Financial Reporting Standard, “international standard”), mainly used by medium – big size organization, the difference between the two is, the first one (F. R. S. S. E.) is for small entities only, while the second one (F. R. S. 102) can be used by any charity organisation, both big and small, although, is not recommended to small entities as it is much complex and might require a trained person.

a.) It encompasses a diverse group of not-for-profit entities that are supported by and provide voluntary services to the public. Examples include charities such as March of Dimes or the American Cancer Society, Girl Scouts, Boy Scouts. VHWOs follow FASB (Financial Accounting Standards Board) standards, and the 2007 AICPA Audit and Accounting Guide: for Not-for-profit Organizations provides additional guidance for accounting and reporting for all nongovernmental voluntary health and welfare organizations.

Any company aim is to increase the profit for the share holders, receive dividend (distribution of profits) in order to invest again or issue shares (selling part of the capital, method mainly used by big business to avoid bank loans and have liquidity – cash flow), take bank loans, while non for profit organization aim, is not to gain profit or save money but to spend for social purposes, explaining how the money was spent. There are four main types of charities structure; Charitable incorporated organization, Charitable Company, unincorporated association and trust. Before setting up a charity you need to decide which structure is the appropriate one for your organization. The purposes of a charity organization are to prevent poverty, enhance education, health, amateur sport, human rights, support religion, to provide public benefit in general, such as “schools”, after schools and recreational activity for kids, elderly or disable people.

P1 Explain different types and purposes of organizations; public, private and voluntary sectors and legal structures. [AC 1]