CPA's & Consultants Providing Business Insight To Churches & Ministries

Get FDIC coverage over $100K through one bank

Posted Fri, 09/26/2008 - 10:07 by Justin Moore

Through a program called the Certificate of Deposit Account Registry Service, or CDARS (pronounced like “Cedars”) you can get full FDIC insurance for your deposit amounts larger than $100,000. Basically, your large deposit made at your bank is broken into smaller amounts and placed with other banks that belong to a special network, who then issue CD’s in amounts less than $100,000, ensuring that your entire investment is covered by the FDIC.

Benefits:
1. The convenience of dealing with one bank
2. Earn one rate on your entire investment

Phase-in filing of new Form 990

Posted Thu, 09/18/2008 - 13:00 by Justin Moore

To allow organizations time to adjust to the redesigned 990 series returns, the IRS is phasing in the new returns during a three-year transition period. Many more non-profits will be allowed to file Form 990-EZ during the phase-in period, according to irs.gov.

Changes to the Draft Form 990

Posted Wed, 09/10/2008 - 11:00 by Justin Moore

A redesigned Form 990, Return of Organization Exempt From Income Tax, will be filed beginning with 2008 tax years (2009 filing season). The IRS has completed its review of the public comments and made revisions to the draft instructions. The revised instructions should be posted at irs.gov by August 15, 2008.

Audit Risk - #5 Risk Definition Series

Posted Wed, 08/27/2008 - 12:40 by Anthony Miller

Audit Risk (AR) expresses the general relationship of risks associated with the auditor's assessments of risk of material misstatements (RMM = inherent risk x control risk); the risk that audit procedures will fail to detect a material financial statement misstatement due to an internal control failure (DR).

Audit Risk must be low because of the high level of assurance provided by the audit opinion.

#5 Contributions - Deductible Amounts

Posted Fri, 08/15/2008 - 01:10 by Kirk Vanderslice

Over the past several weeks we have described the requirements for deducting and recording charitable contributions.

In this post we will discuss calculating the deduction...

The amount of charitable contributions that may be deducted by a taxpayer is limited based on adjusted gross income, the type of property contributed or the nature of the charity.

Limitations:

#6 Contributions - Substantiation Requirements

Posted Thu, 08/07/2008 - 16:42 by Sandy Siegfried

Over the past several months we have discussed the requirements for reporting/deducting charitable contributions. In our final post, we will discuss the substantiation rules...

The Pension Protection Act of 2006 (PPA of 2006) changed the substantiation requirements for deducting charitable contributions. Prior to 2007, donors could deduct charitable contributions using a cancelled check, a receipt from the charity or another reliable written document.

Risk Standards (6 of 6)

Posted Wed, 08/06/2008 - 16:25 by Anthony Miller

In our previous posts we have discussed the new risk standards promulgated by the AICPA affecting audits for years ending after 12/16/07. In post #5 we briefly discussed SAS 108 and 109. Now we will end this series of posts and discuss SAS 110 and 111.

Defining “Those In Charge”

Posted Wed, 07/30/2008 - 15:30 by Anthony Miller

The new auditing standards require certain communications to “those charged with governance”. These individuals are responsible for overseeing the strategic direction of the church or ministry. These same individuals have accountability for and to the entity, including the financial reporting process.

Those charged with governance may include a board of directors, a supervisory board, or trustees. Subgroups (such as an audit committee) may be charged with specific tasks to assist a governing body in meeting its responsibilities.

Detection Risk - #4 Risk Definition Series

Posted Mon, 07/21/2008 - 10:30 by Anthony Miller

Detection Risk (DR) is the risk the auditor will not detect a misstatement in the financial statements. Detection risk is a function of the effectiveness audit procedures.

Therefore:

RMM (defined previously) X DR = Audit Risk

#4 Contributions - General Requirements

Posted Tue, 07/15/2008 - 14:45 by Floyd Langley

Since the beginning of the year, we have been discussing the general requirements for reporting contributions. In this post we will discuss when to record a contribution.

When is the unconditional transfer considered a contribution? When does the church record a contribution? The timing or delivery of the unconditional transfer is very important in determining how/when to record a contribution.

Let’s review the following:
a. Checks that are mailed to a church are considered “delivered” on the date the donor mails it or the date of postmark.