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2024 Yellow Book Updates: What You Need to Know
By Tricia Katebini, CPA, MBA, Partner, Audit The long anticipated 2024 Yellow Book, which supersedes the 2018 Yellow Book, was released Thursday, February 1, 2024, by the United States Government Accountability Office (GAO). The revisions to the Yellow Book reflect major developments in the auditing and accountability professions and emphasize specific considerations applicable to the…
Lessons Learned from Adoption of Topic 606, Revenue Recognition
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 Revenue from Contracts with Customers (Topic 606) to clarify revenue recognition guidance and thereby improve financial reporting. Nonprofit entities who adopted the standard early quickly learned that there is a significant learning curve to properly recognizing revenue under the new…
Profit From an Energy Audit
Organizations routinely evaluate opportunities to reduce expenses. However, many organizations are unaware of the savings that can result from an energy audit. Not only are many of the savings from an energy audit sustainable, they are typically well received by employees and customers. Even better, your organization may qualify for tax breaks for making energy-saving…
Attracting Donor-Advised Funds
The popularity of donor-advised funds (DAFs) has surged in recent years, and DAFs increasingly are considered vital to the success of not-for-profit organizations. If you haven’t already, you should learn about how DAFs work so that you can position your nonprofit to benefit from these charitable-giving vehicles. How DAFs are Managed Generally, DAF accounts are…
Understanding IRS Audit Guidance
IRS examiners usually do their homework before meeting with taxpayers and their professional representatives. This includes reviewing any relevant Audit Techniques Guides (ATGs) that typically focus on a specific industry or audit-prone business transaction. Though designed to help IRS examiners prepare for audits, ATGs are available to the public. So, small business taxpayers can review…
The Audit Dance: A Well-Choreographed Routine
Think of your not-for-profit organization and its external auditor as dance partners performing a well-choreographed routine. To execute the dance properly, each dancer must complete specific moves and coordinate timing with his or her partner. Likewise, your organization and its audit firm each have particular duties in the audit process but share the same end goal:…
Requirements to Classify Costs as Indirect when Allocated as Direct
Q. Do you ever have customer requirements to classify costs as indirect when your accounting practices allocate such costs direct? In some cases, a customer’s request for proposal (RFP) will specify that a particular cost may not be proposed, charged, allocated or billed to the contract as a direct cost, which may create a conflict with your…
What If You Get Audited?
“Audit” is a word that can strike fear into the hearts of taxpayers. However, the chances of an Internal Revenue Service audit aren’t that high. In 2017, the IRS audited 0.5% of all individual tax returns.1 And being audited does not necessarily imply that the IRS suspects wrongdoing. The IRS states an audit is just a…
Activities with Related Entities: Are You Properly Reporting Them?
It’s no secret that the number of not-for-profit organizations is growing while the number of grant dollars is shrinking. Shifting from competing for grant funds to cooperating with other organizations can create substantial value for not-for-profits and the people they serve. Among the ways that organizations can work together are: Purchasing goods and services together; Sharing…