Posted By Jonathan D. Moll, CPA
I am constantly reminded of a conversation I had with a “well-seasoned” CPA that I had briefly met at an industry conference. The seminar was leading up to the implementation of SAS 112. The underlying message being stressed was that, in order to avoid a potentially negative management letter, there was a need to be proactive in training and educating our clients on the accounting issues that we know they struggle with. Whether it was the anticipation of being able to add value to our clients or the fact that the instructor indicated that we were on pace for an early dismissal, the mood as we broke for lunch was positive. However, if there was only one pessimist in the crowd, he found me, and sat next to me during lunch. As we unwrapped our boxed lunch of ham and cheese on white with an apple, he said to me, “If we teach our clients everything we know about accounting, they won’t need us anymore.” My (relatively) youthful optimism wanted to interject with the multitude of reasons why client education was a great idea. “It frees up client’s time to focus on program expansion. It helps build client trust. It improves our ability to effectively audit our clients. It reduces stress.” But by showing maturity well beyond my years I bit my lip and refrained. I responded with what was naturally the next thing that popped into my mind, “You must be a tax accountant.”
There’s no question about it. An organization that consistently produces accurate financial reporting allows its management and governance to focus on the more important issues. However, generally accepted accounting principles (GAAP) for nonprofit organizations can be complex and do not always follow the laws of common sense. We plan for this blog to continue to be used as a resource for you to help keep straight your debits and credits, yet we don’t want our interpretation of what is considered the problem areas to be limited to what we are seeing or hearing from our clients.
So this I ask…what nonprofit accounting issues are troubling you?