Magazine article The CPA Journal

API's Complete Guide to Accounting Procedures for Non-Profit Organizations

Magazine article The CPA Journal

API's Complete Guide to Accounting Procedures for Non-Profit Organizations

Article excerpt

API's Complete Guide to Accounting Procedures for Non-Profit Organizations Written and published by Accountants for the Public Interest, Baltimore, Md. (410-837-6533; fax 410-837-6532), $28

It is estimated that some 60,000 nonprofit organizations are operating in New York State. While many of them have sophisticated accounting systems and extensive internal control environments, many more small and medium-sized organizations lack the resources, staff, and expertise to handle the intricacies of nonprofit accounting. Accountants for the Public Interest (API) has created this guide to assist accounting and business professionals who volunteer their time and expertise to the nonprofit sector.

The Guide boldly tries to encapsulate the qualities, laws, control issues, and accounting principles that govern and define the nonprofit sector within a mere 88 pages, and the results are mixed. It does a good job of outlining the distinctive qualities of nonprofits, discussing various characteristics that distinguish them from their for-profit brethren. This is helpful in showing accountants with little or no nonprofit experience how traditional strategies that work in the for-profit world may be less effective in the nonprofit world because nonprofits face different challenges and often have more nonfiscal concerns.

The Guide also does a fairly good job of discussing some basic laws surrounding nonprofit organizations. While this area may get a little technical, it covers substantial territory that is a must for anyone guiding a nonprofit organization; some knowledge of basic nonprofit law is essential to avoiding potential pitfalls that could cost an organization its exempt status. But the Guide does not even touch upon some tax-related issues that plague many unsuspecting organizations and usually permeate lists of frequently asked nonprofit questions. For example, the Guide is silent on such issues as quid pro quo rules, nonprofit raffles, and intermediate sanctions; it also lacks sufficient coverage of the unrelated business income rules.

The Guide tries to cover the nonprofit control environment, working with the board, and accounting issues in a little over 20 pages. In contrast, the AICPA's Audit and Accounting Guide for not-for-profit organizations needed nearly 500 pages, and the AICPA issued an additional 94-page audit risk alert to keep practitioners up to speed on new developments. …

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