Case 3.3 United Way of America
Case 3.3
1. Identify and briefly describe fundamental and cost-effective internal controls that charitable organizations could implement to reduce their exposure to theft losses.
Fraud has been on the rise over the past decades, and America’s charitable communities have not been immune to these acts. With the tremendous expanding, charity organizations have controlled a lot of financial and nonfinancial resources. While it is common that many small and medium-size volunteer organizations have lack of continuity of volunteers, short of supervision of volunteers, poor of segregation of duties, absence of internal auditors. Even though the Sarbanes-Oxley Act of 2002 does not mandate an internal audit for nonprofits, Non-profit organizations is under scrutiny & close-watch by regulatory authorities, many different sizes of NPO are start to some risk assess and implement of internal controls over their financial resources to prevent fraud and loss.
In the United States, the most widely accepted model for control is The Committee of Sponsoring Organizations of the Tread-way Commission’s (COSO’s) Internal Control- Integrated Framework. COSO broadly defines internal control as a “a process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.”
COSO frameworks are available to evaluate the effectiveness of internal control in any type of organization.
The following internal controls s should be implemented in charity organizations to reduce their exposure to theft issues:
1. Segregation of duties – this is the most effective and costless method of ensure the resource of a charity organization. A key feature of internal financial controls is to ensure that no single individual has sole affection for any
1. Identify and briefly describe fundamental and cost-effective internal controls that charitable organizations could implement to reduce their exposure to theft losses.
Fraud has been on the rise over the past decades, and America’s charitable communities have not been immune to these acts. With the tremendous expanding, charity organizations have controlled a lot of financial and nonfinancial resources. While it is common that many small and medium-size volunteer organizations have lack of continuity of volunteers, short of supervision of volunteers, poor of segregation of duties, absence of internal auditors. Even though the Sarbanes-Oxley Act of 2002 does not mandate an internal audit for nonprofits, Non-profit organizations is under scrutiny & close-watch by regulatory authorities, many different sizes of NPO are start to some risk assess and implement of internal controls over their financial resources to prevent fraud and loss.
In the United States, the most widely accepted model for control is The Committee of Sponsoring Organizations of the Tread-way Commission’s (COSO’s) Internal Control- Integrated Framework. COSO broadly defines internal control as a “a process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.”
COSO frameworks are available to evaluate the effectiveness of internal control in any type of organization.
The following internal controls s should be implemented in charity organizations to reduce their exposure to theft issues:
1. Segregation of duties – this is the most effective and costless method of ensure the resource of a charity organization. A key feature of internal financial controls is to ensure that no single individual has sole affection for any
Citations: How Are Audit Fees Reported in a Proxy? | eHow.com http://www.ehow.com/facts_7661880_audit-fees-reported-proxy.html#ixzz20POZCVfx Futter,V.(2002).Non-profit Governance and Management Hopkins, R.B, Gross, R.V. &Gross, C.V. (2009).Non-Profit Governance: Law, Practices and Trends Ljung, D.(2005)." Eyeing nonprofits: the Charity Integrity Act & other pending Governance, accountability rules"Moneywatch.com.Retrieved Feb10, 2011. From http://findarticles.com/p/articles/mi_m0ICC/is_10_73/ai_n15727425/ Simpson,S.D.(2008).Multistage Guide to Regulation and Taxation of Non-profits