Standards for Financial Reports of Not-for-Profit and Governmental Organization

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All not-for-profit and governmental organizations are all required to prepare financial reports that will be utilized by the external parties. It is significant to note on the preparations of all statements required from the governmental and not-for-profit organization a private auditor produces a mandated a statement also. A private auditor report is deemed as the financial audit. The object of the auditors’ report is to determine that all financial statements are presented completely and represented in an impartial manner. When the term fairly is utilized it is to enforce the accounting practices followed by the generally accepted accounting principals. The report from the external auditor is to describe their standpoint of the fair representation within the financial statements. A key element the auditors’ provide for financial statements is the assurance adequacies of misstatements are not present. It is noted that the external auditors report is not utilized for the purpose of confirming that the financial statements are clear of mistakes or fraudulence.

Generally Accepted Auditing Standards

It is common for the nonprofits to use certified public accounts for the required auditing of financial statements. External CPAs or audit agencies may be utilized for the state and local governments auditing requirements. All CPAs that audit are required to follow the AICPA’s generally accepted auditing standards. The Auditing Standards Board of the AICPA’s assign the
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