Tuesday, May 15, 2007


Technical Guide on Accounting and Auditing in Not-for-Profit Organisations (NPOs)/Non-Governmental Organisations (NGOs)
Research Committee of the Institute of Chartered Accountants of India (www.icai.org)


It is not unusual to find fixed assets recorded at a nominal amount of Re 1 in the balance-sheets of NPOs (not-for-profit organisations). The assets may have been received free of cost as donation or grant. From an accounting angle, there is no harm with such low nominal values, but it is necessary for the auditor to be extra careful with regard to these assets, because "there is a greater possibility of their misappropriation," cautions the Research Committee of the Institute of Chartered Accountants of India (www.icai.org) in a recent publication titled Technical Guide on Accounting and Auditing in Not-for-Profit Organisations (NPOs)/Non-Governmental Organisations (NGOs).

The Institute advises auditors to review the assumptions and procedures in the computation of fair value of the assets. "The auditor should also verify quantitative details from the reconciliation statement between the assets existing at the beginning of the period and at the end of the period."

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