An auditor failed to modify their opinion for material misstatements in the comparative Statements of Activities of a not-for-profit (NFP) foundation that underreported fundraising and general and administrative costs resulting in part from intermixing natural and functional expenses in the total operating expense amount. Program expenses were presented outside of operating expenses. Most of these errors were corrected in the comparative presentation in the following year’s comparative financial statements, but withno acknowledgment of the correction of these errors. The same auditor failed to modify their opinion in that following year’s audit. An auditor’s report was not modified on a set of NFP comparative financial statements where two-thirds of its net assets were improperly identified as donor restricted in perpetuity versus not in perpetuity. Detail footnote totals did not articulate with the amounts on the Statement of Financial Position. Neither the financial statements nor the auditor’s report were recalled and reissued. The subsequent year’s auditor’s report was notmodified for the correction of this error. Recently issued SAS No. 146, QualityManagement for an Engagement Conducted in accordance with GAAS, paragraph 6, states, “The public interest is served by the consistent performance of quality audit engagements that achieve the objective(s) of this SAS and other AU-C sections.” Appropriate audit opinions matter, especially in this time in our country’s history when it is often challenging to knowwhat to believe and trust in. Users of auditor’s reports should never have reason to question their veracity. Paul H. Koehler, CPA, is a sole practitioner in Lincoln, Neb. He has more than 45 years’ experience in auditing, training, and consulting, specializing in nonprofit organization and state and local governments. You may contact him at (402) 488-1578. HBE LLP is pleased to announce that for the eighth consecutive year, they have been named to the Accounting MOVE Project’s 2022 Best Firms for Equity Leadership and 2022 Best Firms for Women. With women leading 42% of the firm, HBE is one of the 15 firms awarded with these honors nationwide. The MOVE methodology investigates the factors proven to be essential for career success: Money, Opportunity, Vital supports, and Entrepreneurship. HBE emphasizes employment programs proven to retain midcareer women, including phased return to work for new parents, remote-work opportunities, worklife supports for the busy season, and coaching to help managers lead teams based on productivity, not face time. “We are committed to fostering an environment where all of our associates, regardless of gender, age, race, or other diversity, are able to thrive within the profession,” stated Scott Becker, Managing Partner of HBE. “Through our core values centered on integrity, respect, and teamwork, we will continue to support and advance flexible leadership pathways built upon unique contributions and talents.” www. hbecpa.com 19 nebraska society of cpas W W W . N E S C P A . O R G
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