Memo #8 - The Annual Church Audit

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The Annual Church Audit by Dan Busby, CPAAUDIT GUIDELINESChurch board members have a long list of responsibilites. Among these is the responsibility for the money that flows through the church. It’s such an important issue, that the Manual contains at least three paragraphs about it.Paragraphs 129.22 and 129.23 touch on keeping accurate records and never letting a single individual have control of the money. These make good common sense. Paragraph 129.24 requires an annual audit of the church’s financial records. This is a bit more difficult.Key ConceptsHowever, an annual audit of the church’s records is a must. External audits Good accounting records and are performed by an independent auditor who has no impairing relationship good stewardship go hand in to the church and, therefore, can review its data procedures with maximum hand.objectivity. Internal audits generally are performed by church members or by Your church is the trustee of persons closely associated with the church.the money it receives—handle it carefully. External auditsThe ideal is to have an annual audit performed by independent CPAs. Tailor meaningful financial state-However, only large churches generally can afford this extra expense. Ex-ments for your church.ternal audits of smaller often are done on a non-GAAP basis—the Prepare timely financial reports statements do not conform to the full accrual method with depreciation rec-covering all of your funds—not ognized. ...

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Publié par	Hibos
Nombre de lectures	53
Langue	English

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thismemoasa klistorourannual

ualChurchAudit

byDanBusby,CPA

ELINES mbershaveaon.Amitesthesongesiislfotsersnoplibi rthemoneythatflowsthroughthechurch.It’ssuchan ttheanuasattelsnatniaaphsragrepathre.tituobao 2and129.23touchonkeepingaccuraterecordsandnever ividualhavecontrolofthemoney.Thesemakegood agraph129.24requiresanannualauditofthechurch’s hisisabitmoredifficult alauditofthechurch’srecordsisamust.Externalaudits independentauditorwhohasnoimpairingrelationship erefore,canreviewitsdataprocedureswithmaximum lauditsgenerallyareperformedbychurchmembersorby

veanannualauditperformedbyindependentCPAs. churchescanaffordthisextraexpense.Ex-llerchurchesoftenaredoneonanon-GAAPbasis—the nformtothefullaccrualmethodwithderec-Pauditsofsmallerchurchesoftenareacceptabletobanks hatrequireauditedfinancialstatements.(GAAPstands tedAccountingPrinciples.)

hurchmayformanauditcommitteetoperformaninter-ethevaliditofthefinancialstatements.(Sampleinter-forchurchesfollowbelow.)Ifthecommitteetakesits esultmaybesignificantimprovementsininternalcon-procedures.Toooften,theinternalauditcommitteeonly eview,commendsthetreasurerforajobwelldone,and vesecurcwithafalsesenseofsecurity.

INTERNALAUDITGUIDELINES ATEMENTS ■ erapnodtalemisibaanssuditbmeomtnlhifancnailstatementspreAr-

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Offeringfundsshould never tcusto oasinperson.

Kee accurate records videaccurate recei

TheAnnualChurchAudit

Dothefinancialstatementsincludeallfunds(unrestricted,temporarily restricted,andpermanentlyrestricted)? ■ D finin fin statementofactivity? ■ ntsArcnalabtnuoccaencnafiethnieserocdrserocailamouithedwncil presentedinfinancialreports?

■ General Arecashhandlingproceduresinwriting? Hasthebankbeennotifiedtonevercashcheckspayabletothe

AreSundayschoolofferingsproperlyrecordedanddeliveredtothe ycounters? Areproceduresestablishedtocareforofferinandmoniesdelivered ficebetweenSundays? Offeringcounting Areatleasttwomembersofthecountincommitteepresentwhenof-arecounted?(Thepersonscountingthemoneyshouldnotin-.) Domoneycountersverifythatthecontentsoftheofferingenvelopes areidenticaltotheamountswrittenontheoutsideoftheenvelopes? Areallchecksstampedwitharestrictiveendorsementstampimmedi-atelyaftertheofferingenvelopecontentsareverified? Aremoneycountersrotatedsothesamepeoplearenothandlingthe

Aredonor-restrictedfundsproperlidentifieddurintheprocessof ferings? Aretwomembersoftheofferincountinteamincustodoftheoffer-untilitisdepositedinthebank,placedinanightdepository,orthe Areallfundspromptlydeposited?Compareofferingandotherreceipt recordswithbankdeposits. Areallreceiptsdepositedintact?Receiptsshouldnotbeusedtopay xpenses. ■ tricResfundteds Aredonationsforrestrictedpurposesproperlyrecordedintheaccount-Arerestrictedfundsheldfortheintendedandnotson

D TIRE Areindividualdonorrecordskeasabasistovidedonoracknowl-edutionsof$250ormore? nogoodsorserviceswereprovided(otherthanintangiblereligiousben-efits)inexchangeforagift,doesthereceiptincludeastatementtothis f goodsorservices(otherthanintangiblereligiousbenefits)werepro-videdinexchangeforagift,doesthereceipt inf i federalincometaxislimitedtotheexcessoftheamount anymoneyandthevalueofanypropertycontributedbythedonor