Fraud in Non-Profits?!

It can’t be. After all, these organizations are meant to help those less fortunate than ourselves. Why would anyone commit fraud against a non-profit organization? Unfortunately, because they can is too often the answer. Many non-profit organizations simply don’t have the staff or the budget to implement proper internal control procedures to help mitigate the …

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The Rules of Raffles

There are a lot of rules to remember when nonprofit organizations hold raffles. Here is a summary of those rules to keep in mind and to help with planning in advance of the raffle. If the raffle prize is valued at $600 or more AND at least 300 times the raffle ticket price, you must …

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Properly Classifying Property Held for Sale

Proper classification of assets on your entity’s statement of financial position (SOFP) and disclosure in the footnotes is important for both accuracy and transparency purposes. The users of your financial statements should know all significant purposes and uses of the assets listed. When you contact a broker to sell any property, you may need to …

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Use of a Calculation Report in the Court Room

Per the AICPA Statement on Standards for Valuation Services #1 (SSVS #1), a valuation analyst may complete a calculation engagement for which he/she would submit a calculation report. A calculation engagement is much more limited in scope than a valuation engagement. A valuation engagement is performed for the purpose of expressing an opinion of value …

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Inventory Reserves

If you are a company that carries inventory, you should most likely have an inventory reserve accounting policy in place. Creating an inventory reserve is a proactive and conservative accounting approach that companies use to prepare for events such as spoilage, theft, obsolescence, and other adverse situations on their inventories. An inventory reserve is a …

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Requirements for Communications to Attendees at Your Special Event

You may be aware of the rule for sending an acknowledgement to a donor after receiving a contribution, but are you also aware of the IRS requirements when someone attends a fundraising event? Usually, special events provide some sort of benefit back to the attendee, so that only a portion of their ticket cost is …

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Start Up Companies – Why You Need a Valuation for Stock Options

It seems everyone remembers the Enron accounting scandal. Prior to the company going bankrupt, Enron executives were accelerating payments under their deferred compensation plans in order to cash in before the bankruptcy. Other publicly-traded companies were seemingly abusing the timing of stock option awards by back-dating the option grants. Section 409A was added to the …

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Accounting Standards Update: Going Concern Disclosures

Traditionally under GAAP, financial statements are prepared using the going concern basis of accounting. This basis of accounting operates under the presumption that the reporting organization will continue to operate as a going concern (except in limited circumstances). Ultimately, this basis of accounting is critical to financial reporting because it establishes the fundamental basis for …

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Sale of Business – Personal Goodwill Considerations

Let’s say you have built a successful business and are now considering selling it. You have been approached by a company that wants to acquire the assets of the business as opposed to a stock acquisition. If the business is formed as a partnership, an LLC treated as a partnership, or an S corporation, no …

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Exempt Organizations and Sales Tax

In Arizona, entities are required to pay a “transaction privilege tax” on sales of goods, most commonly referred to as a “sales tax.” However, under certain circumstances, entities are exempt from collecting and remitting this tax. If your entity is recognized by the IRS as a non-profit charitable organization under IRC Code section 501(c)(3), retail …

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