Are the planning procedures undertaken for not for profit organisations differ from procedures for profit making organisations?
They differ very little but the auditor should have specific regard to any laws, guidelines or regulations imposed on the entity by a regulator body
How is audit evidence for not for profit obtained?
Obtaining audit evidence from not for profit organisations may be a problem, particularly where organisations have informal arrangements and this may impact on the auditor’s report
What are some of the risks associated with not for profit organisation?
Small not for profit organisations will generally suffer from internal control deficiencies common to small enterprises such as lack of segregation of duties and the use of unqualified staff. Shortcomings may arise from the staff’s lack of training and also, if they are volunteers from their attitude in that they may resent formal procedures
What should the auditor ensure that they make the following matters clear
- The addressee of the report
- What the report relates to
- The scope of the engagement
- The work done
- The opinion drawn
- The respective responsibilities of auditors and management/trustees/directors
What is the main factor that differentiates between for profit entities and not for profit entities?
the key objective of not for profits is to provide a service to the public. Therefore its focus will be on cost saving so that it can operate within its budget
What should the auditor establish when carrying out an audit of a not for profit organisation?
- whether a statutory audit is required
- what form the report should take
- To whom the report should be addressed
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