AICPA - Audit and Accounting Guide: Not-For-Profit Entities, 2018

(Updated as of March 1, 2018)

This guide was prepared by the Not-For-Profit Organizations Committee.

This AICPA Guide has been developed by the AICPA Not-for-Profit Entities Expert Panel and Guide Task Force to assist practitioners in performing and reporting on their audit engagements and to assist management of not-for-profit entities (NFPs) in the preparation of their financial statements in conformity with U.S. generally accepted accounting principles (GAAP).

An AICPA Guide containing auditing guidance related to generally accepted auditing standards (GAAS) is recognized as an interpretive publication as defined in AU-C section 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards. Interpretive publications are recommendations on the application of GAAS in specific circumstances, including engagements for entities in specialized industries.

Interpretive publications are issued under the authority of the AICPA Auditing Standards Board (ASB) after all ASB members have been provided an opportunity to consider and comment on whether the proposed interpretive publication is consistent with GAAS. The members of the ASB have found the auditing guidance in this guide to be consistent with existing GAAS.

Although interpretive publications are not auditing standards, AU-C section 200 requires the auditor to consider applicable interpretive publications in planning and performing the audit because interpretive publications are relevant to the proper application of GAAS in specific circumstances. If the auditor does not apply the auditing guidance in an applicable interpretive publication, the auditor should document how the requirements of GAAS were complied with in the circumstances addressed by such auditing guidance.

The ASB is the designated senior committee of the AICPA authorized to speak for the AICPA on all matters related to auditing. Conforming changes made to the auditing guidance contained in this guide are approved by the ASB Chair (or his or her designee) and the Director of the AICPA Audit and Attest Standards Staff. Any changes to the auditing guidance in this guide exceeding that of conforming changes are issued after all ASB members have been provided an opportunity to consider and comment on whether the guide is consistent with the Statements on Auditing Standards (SASs).

The Financial Reporting Executive Committee (FinREC) is the designated senior committee of the AICPA authorized to speak for the AICPA in the areas of financial accounting and reporting. The financial accounting and reporting guidance contained in this guide was approved by the affirmative vote of at least two-thirds of the members of FinREC in November 2012. Conforming changes made to the financial accounting and reporting guidance after that vote are approved by the FinREC Chair (or his or her designee). Updates made to the financial accounting and reporting guidance in this guide exceeding that of conforming changes are approved by the affirmative vote of at least two-thirds of the members of FinREC.

This guide does the following:

Identifies certain requirements set forth in FASB Accounting Standards Codification (ASC).

Describes FinRECs understanding of prevalent or sole industry practice concerning certain issues. In addition, this guide may indicate that FinREC expresses a preference for the prevalent or sole industry practice, or it may indicate that FinREC expresses a preference for another practice that is not the prevalent or sole industry practice; alternatively, FinREC may express no view on the matter.

Identifies certain other, but not necessarily all, industry practices concerning certain accounting issues without expressing FinRECs views on them.

Provides guidance that has been supported by FinREC on the accounting, reporting, or disclosure treatment of transactions or events that are not set forth in FASB ASC.

Accounting guidance for nongovernmental entities included in an AICPA Guide is a source of nonauthoritative accounting guidance. As discussed in

Any auditing guidance in a guide appendix or chapter appendix in a guide, or in an exhibit, while not authoritative, is considered an other auditing publication. In applying such guidance, the auditor should, exercising professional judgment, assess the relevance and appropriateness of such guidance to the circumstances of the audit. Although the auditor determines the relevance of other auditing guidance, auditing guidance in a guide appendix or exhibit has been reviewed by the AICPA Audit and Attest Standards staff, and the auditor may presume that it is appropriate.

AICPA Guides may include certain content presented as Supplement, Appendix, or Exhibit. A supplement is a reproduction, in whole or in part, of authoritative guidance originally issued by a standard setting body (including regulatory bodies) and applicable to entities or engagements within the purview of that standard setter, independent of the authoritative status of the applicable AICPA Guide. Both appendixes and exhibits are included for informational purposes and have no authoritative status.

This guide applies to the financial statements of nongovernmental NFPs that meet the definition of an NFP included in the FASB ASC glossary. See , "Introduction," for further information.

This guide does not discuss the application of all GAAP and all GAAS that are relevant to the preparation and audit of financial statements of NFPs. This guide is directed primarily to those aspects of the preparation and audit of financial statements that are unique to NFPs or are considered particularly significant to them.

The AICPA gratefully acknowledges those current and former members of the AICPA Not-for-Profit Entities Expert Panel who reviewed or otherwise contributed to the development of this edition of the guide: Jennifer Brenner, Karen Craig, Susan L. Davis, Christina A. Dutch, Lisa Hinkson, Andrew Prather, and James R. Summer III.

The AICPA also thanks Susan E. Budak for her invaluable assistance in updating the 2018 edition of the guide.