The Regulatory Reforms For Charities

948 WordsJul 28, 20164 Pages
The summary was great and clearly presented the important facts of the case. There are some items that I believe could have been included to improve the summary such as Kapp (2015) stated that United Way of America and many other charities are plagued with frauds because of inadequate or nonexistent internal controls. Additionally, top managers easily take from the millions of dollars donated by the public for personal use with very little or no regulatory oversight by the state and federal agencies. Charitable organizations submit form 990 to the Internal Revenue Service (IRS) only. The proposed regulatory reforms for charities are that they should be subject to an annual independent audit by an accounting firm. Some states have passed legislation requiring certain organization to be audited annually. Nevertheless, Kapp (2015) reports that the United Way of America was audited by Arthur Andersen during the time frame that Aramony embezzled from the organization. The Committee of Sponsoring Organizations (COSO) defines internal control as a process, effected by and entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the reliability or financial reporting, the effectiveness and efficiency of operations, and compliance with applicable laws and regulations. (Louwers, Ramsay, Sinason, Strawser, & Thibodeau, 2015). Internal Control helps entities achieve important objectives and sustain and impose performance. A properly
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