Nonprofits, construction companies, or companies with external investors are all examples of companies that may be required to get audits. However, these requirements may be dependent on certain circumstances. For instance, a nonprofit that recently reached a higher level of government funding may have crossed the audit requirement threshold. That said, there are many nuances involved in determining whether a switch to or from a review to an audit would be necessary. Regardless, companies do experience this transition and the following information is aimed at determining the difference between the two.
Congratulations you’ve decided to take the plunge and start studying for the CPA exam. Successfully completing the CPA exam can seem like a daunting task, especially with the publically posted (low) pass rates. However, the end result is well worth all the time, struggles and sleepless nights. Earning a CPA designation should result in higher earnings potential and additional career opportunities.
Edited on 1/26/19
Despite tax-exemption, nonprofit organizations are still subject to reporting requirements with taxing authorities, namely the Internal Revenue Service and various state revenue departments. For the Boards and Executive Directors of nonprofits, this means it's important to have a clear understanding of their organization and where it falls within filing requirements.
Which is it?
Entities that receive federal assistance (i.e. federal funds, federal grants, and federal awards) are subject to audits in order to ensure that the federal assistance programs are utilized in compliance with the federal government. Before 1984 these audits were performed per program rather than per entity. In other words, entities with multiple assistance sources were subject to multiple audits and the costs of those audits.
For the sake of efficiency and cost-effectiveness the Single Audit Act of 1984 was passed. The act earned its name because its purpose is to consolidate these audits, allowing entities to receive one audit over all of their federal assistance.
Due to this act these audits are referred to as "Single Audits".
Using QuickBooks requires the creation and maintenance of lists such as customer, vendor, chart of accounts lists. Frequently, clients come across a scenario where they find duplications within these lists. For instance, they find two slightly different versions of the same customer or vendor.
Unfortunately, this can become a data management nightmare. Applying payments to a customer's account, pulling a report to determine if a vendor should receive a 1099, or posting a transaction to a general ledger account, etc. when there are active duplications in the necessary lists will result in potentially major errors.
This issue seems to be more prevalent when more than one person has access to the QuickBooks® data. One person may not see the name already created in the list by another individual and will proceed to create another. QuickBooks has a built-in feature to prevent this. A warning message should appear indicating the name is already in use and asks would you like to merge them. However, even the slightest variable in how the names are entered will bypass this feature. It only takes one small difference in the name to create a new one. An example is putting a middle initial in a name of an individual or a comma in the name of a business.
In July 2014 the IRS released a new, easier version of Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.
Businesses can make any number of transactions in a given year. A transaction being any business agreement or exchange that one makes with another person or business. To minimize mistakes and increase efficiency business should utilize QuickBooks to memorize transactions.
QuickBooks Memorized transactions:
Instructions on memorizing QuickBooks transactions.
Many of my clients ask me about real estate investment as a means to diversify their investment portfolio.
What is QuickBooks Class tracking?
Class tracking is a feature in QuickBooks that enables you to keep track of your transaction data by creating classes to categorize them.
What is a class?
Classes are assigned to transactions that relate to one another by category. For instance, many clients have a need to track income and expenses by categories such as, department, business segment, location, etc.
This feature is the best way for a business to separate any significant segments of the business without having to add additional income and expense accounts to the general ledger.
- For profit companies may want to track multiple locations or divisions of the company.
- Not-for-profit companies may need to track grants and restricted and unrestricted funds.
- Any company doing business with a governmental entity can use classes to track fixed priced jobs versus cost plus jobs versus overhead.