The Audit of NotforProfit Organization
Assurance Engagement is expensive, so companies which are exempt from statuary audit may go for a Review Engagement. The objective of a review engagement is to enable an auditor to state whether, on the basis of procedures which do not provide all the evidence that would be required in an Assurance Engagement, anything has come to the auditor’s attention that causes the auditor to believe that the financial statements are not prepared, in all material respect, in accordance with an identified financial reporting framework (Puttick, Van Esch, amp. Kana 2007 p. 73). As it is less expensive so it involves the application of less detailed audit procedures than an Audit and provides a moderate level of assurance which is expressed in the form of negative assurance. The review engagement is hence, suitable for small NFPs to ensure the donators and volunteers of their fairness of operations and activities to achieve the goals of the organization. There are many forms of business organizations and non-profit organizations are one of the sorts which are increasingly gaining attention by authorities. Non-profit organizations include charities, local government bodies like councils and other government-funded bodies like housing associations. Broadly speaking, NFP’s include bodies whose aim is to provide some educational, health or another social service with an intention to aid the society rather than generating wealth or profits of the organization (Wood amp. Powell, 1989). Charity is of the most common forms in not for profit organizations. The major differences between a company and a charity when it comes to auditing involve the presentation criterion which differs for both. Charities are normally tax-exempt hence auditing changes for the charities. Auditing scope and method change greatly as charities rely on cash donations and grants for the regular operations of the organization (Becker amp. Terrano 2007, pp. 1-5).