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The objectives of financial reporting for nonprofit
organizations are to provide information to current and
potential resource providers and others in assessing (a)
the services a nonprofit organization provides and its
ability to provide those services and (b) how management
has discharged its stewardship responsibilities, as well
as providing information about (c) the organization’s
economic resources, obligations, and net resources and
(d) the effects of transactions, events, and
circumstances that change those resources (that is the
organization’s performance or service efforts and
accomplishments). More specifically, nonprofit financial
reporting objectives are to:
- communicate the methods
resources have been used to meet the organization’s
objectives and external requirements
- identify an organization’s
principal programs and their costs
- disclose the degree of control
exercised by donors and funding sources over use of
resources
- help the user evaluate the
organization’s ability to carry out its fiscal
objectives
- provide relevant information to
meet the common interests of donors, members,
creditors, and others who provide resources to
not-for-profit organizations
Groups that are particularly
interested in the financial information of a nonprofit
organization include:
- Funding sources and
contributors to the organization
- Regulatory agencies
- Governing boards (board of
trustees or directors)
- Beneficiaries of the services
rendered by the organization
- Employees
- Creditors and potential
creditors
- Constituent organizations: for
example, a local chapter of a national organization
Client references available upon
request
Links of Interest
Nonprofits:
Internet Nonprofit Center
Information for and about Nonprofits
http://www.nonprofits.org/
Internal Revenue Service
http://www.irs.ustreas.gov
State of Michigan - Attorney
General
License to Solicit - information
and forms
http://www.ag.state.mi.us/
Other
Audits
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audits, and related topics:
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