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美国college essay:营利机构与非营利机构区别分析(6)

时间:2015-02-04 09:39来源:www.ukassignment.org 编辑:lynn406 点击:
The Sarbanes-Oxley Act requires that every members of the organizations audit committee must be the members in board of directors, not involved in the organizations management and not receiving fee fo
 
The Sarbanes-Oxley Act requires that every members of the organization’s audit committee must be the members in board of directors, not involved in the organization’s management and not receiving fee for auditing. One of the members in the audit committee has to be the financial expert. However, there are no standard requirements saying that nonprofit organizations should carry out full audit for their accounts. Therefore, it is the responsibility of the nonprofit organizations to consider whether to conduct audit to provide assurance for their financial statements through cost and benefit analysis. As the cost of audit is quite expensive, those affordable to conduct audit would normally the medium or large nonprofit organizations. For those nonprofit organizations that conduct annual audits, it is necessary for the board to ensure the independence of the audit committee. Besides that, it is important to make sure that the members of the committee have financial competency to understand and evaluate the financial statements, audit the accounts and make suitable financial decision. The decision made should then be review periodically by the board. For those nonprofit who do not conduct audit, the boards have to establish at least the financial committees. Besides, they should at least choose a review for their financial statements or hire professional accountant to manage their financial statements.
 
审计员的责任——Responsibilities of Auditors
 
As provided in Sarbanes-Oxley Act, all organizations include profit and nonprofit organizations should change their audit partner for every five years to ensure proper financial practices and prevent collusion among the organizations to counterfeit the accounts. Besides that, the nonprofits organizations should not employ the same auditing firm for undertaking other non-audit services such as bookkeeping, financial information systems, consultation, and other expert services on behalf of that organization. Moreover, the significant accounting policies and practices and discussion with management should be disclosed to organization’s audit committee by the auditing firm. This will enable the committee to oversee the organization more effectively and provide higher transparency.
 
‌经公正的财务报表——Certified Financial Statements
 
According to Sarbanes-Oxley Act, the chief executive officer (CEO) and the chief financial officer (CFO) must certify on the appropriateness of financial statements and fair presentation of the financial condition and operations of the company. They are liable for the certification and will be penalty for impropriate and false certification. This provision is to ensure that the members of the organizations will carry out their duties to ensure proper preparation of financial statements and check those statements for accuracy before publish them out. Likewise, a nonprofit organization’s CEO and CFO should certify the financial statements. However, they will not liable for the accuracy of their financial statements. On the other way round, they sign-off to show they understand on the organization’s financial condition. The CEO must acquire the knowledge related with the organization’s field, excel in raising fund and equip with other related skills that will help him or her to understand the financial statements. If he or she lack of financial ability to do so, he or she must then hire a qualified personnel as CFO to assist this task. Even the CEO and CFO of nonprofit organizations do not liable for their certification on financial statements; their signs give assurance that they have checked the statements with due care and the statements are free from material misstatements. Beside financial statements, Form 990 or 990-PF is another important financial document to a nonprofit organization. This document must be filled completely and accurately, checked, reviewed, signed off and approved before sent to the related agency.
 
内幕交易和利益冲突——Insider Transactions and Conflicts of Interest
 
The Sarbanes-Oxley Act completely prohibits the insider transactions that involve loans to the organizations’ members. This is because it will usually generate further problems related with conflict of interest. Even nonprofit organizations do not have the practice to give loan to insiders; this provision is still applicable to nonprofit organizations to prevent any occurrence of this activity. If such loans are given, the nonprofit organizations must first receive the approval by the board and document the processes, values and terms of that loan clearly. Besides, the organizations must then have the conflict of interest policy with disclose to guide the board and members of the organizations for making decision independently. As nonprofit organizations’ financial transactions are highly controlled for transparency, insider transaction is strongly not recommended.
 
披露——Disclosure
 
Even many of the requirements of Sarbanes-Oxley Act on the disclosure of organizations do not apply to nonprofit organizations; they are required to fill Forms 990 or 990-PF and make it available for access by everybody. The purpose of this law is to request nonprofit organizations to provide their donors, clients, public and others with a precise picture of their financial condition. However, the weakness of this law is that the form is usually not filled accurately and completely and is not received timely. This is due to lack of strict enforcement of this requirement and thus provides the opportunity to some organizations to play trick on this.
 
告密者保护——Whistle-Blower Protection
 
Sarbanes-Oxley Act provides new protections to whistle blowers and gives punishments to those taken action to whistle blower to prevent them to reveal the true. The protections apply not only to the whistle blowers’ job, safety and life; it also extends to the whistle blowers’ family when necessary. This provision applies to both profit and nonprofit organizations to prevent anyone in the organization to take action against other that unseal their mistake. As profit organizations, nonprofits should develop a formal procedure to handle employee’s complaint and avoid reprisal. The complaints must be taken into consideration seriously, being investigated, being justified and solved effectively. Moreover, a confidential mechanism must be developed to encourage those witness the irregulaties to make a report. This effort is to protect the person who reveals the true from any harm and punishment. At the same time, nonprofit organizations will start to protect themselves by eliminating any careless and irresponsible practices that will be revealed by other. Through the protection of this Act that encourage disclose of improper conduct, the transparency and integrity of nonprofit organizations increase.
 
文件销毁——Document Destruction
 
According to Sarbanes-Oxley Act, the destruction which includes alter, cover up, falsify or destroy the litigation-related documents to prevent its use in an official proceeding is an offend. The Act gives great attention on document destruction and seems it as a process that must be monitored, justified, and carefully managed. Therefore, like profit organizations, nonprofit organizations also have to maintain appropriate records and documentations for their operations. The necessary documents include records for financial transactions, contract, fundraising obligations, employment file and others influential information. In order to prevent document destruction, nonprofit organizations should enforce their own policy to guide and regulate their members to ensure proper dealing with the documents. False documentations will be a serious crime to nonprofit organizations.


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