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AUDIT BEST PRACTICES FOR COMMUNITY DEVELOPMENT CORPORATIONS May 2011

AUDIT BEST PRACTICES FOR COMMUNITY DEVELOPMENT CORPORATIONS May 2011. Correcting that “Audit” Mindset. Auditing Standards-What’s New?. SAS 99 through 121

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AUDIT BEST PRACTICES FOR COMMUNITY DEVELOPMENT CORPORATIONS May 2011

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  1. AUDIT BEST PRACTICES FOR COMMUNITY DEVELOPMENT CORPORATIONSMay 2011

  2. Correcting that “Audit” Mindset

  3. Auditing Standards-What’s New? • SAS 99 through 121 • MORE clarity of roles, purpose of audit, risk assessment, fraud considerations, evidence, planning & supervision (independence), risk & materiality, sampling • Auditor’s responsibilities

  4. Is Your CDC Ready? Prepared? • How much are YOU doing for auditor? • Are you “ready” for auditor? • How much was auditor usually doing FOR you? • Adjustments? • Depreciation? • Accruals?

  5. Accounting Standards-What’s New? • Not so much… • Mainly “familiar” rules, potentially new issues facing you, like.. • Lower of cost or market (e.g. writing down your real estate holdings) • Debt ratio concerns for readers • Consolidations

  6. Classified statements Current assets Current liabilities Support income Earned income Programmatic expense Administrative expense Fundraising expense Consolidated statements Consolidating schedules Value of real estate = same for years? Excess acronyms Clear info on restricted net assets Comparative statements Functional expense details In meaningful way Footnote references in statements Readable, meaningful footnotes – of what’s needed Clean, clear schedules – especially with A-133 If Management Letter – RESPOND! AND Pay attention to your 990! Here’s What We’re Seeing…

  7. EXPENSES ANALYSIS • Recent national non-profit study found 25 – 45 year olds consider the Internet “grades” for NPO’s before giving • The quality of management determines quality of decision making about incurring expenses….

  8. AUDIT “COST” • What does you audit tell its readers • Funds (income & debt) are MUCH MORE SCARCE, readers better: • Understand the business • Understand the financial results • See appropriate ratios • Have accurate, timely, trusted financial statements • How can you save on audit costs? Talk with your auditor! • Do NOT make your funders “guess”

  9. Need a follow up? • Contact LISC – They are your partner, their business is your growth • Contact Joanne @ joannemh@yourbeancounters.com

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