Please See The Audited Financials And Form 990 Links Below

Please See The Audited Financials And Form 990 Links Belowhttpwww

Please see the audited financials and Form 990 links below. Ensure that the 990 and the audited financials are for the same period. Review the balance sheet of both documents (Statement of Financial Position) and verify that the total assets number is roughly the same. If they differ significantly, it may indicate you are reviewing different entities or different balance sheet dates. Calvert County, MD.

Paper For Above instruction

Understanding the Financial Reports and Their Consistency: A Guide for Reviewers

Introduction

Financial transparency and accountability are essential components of nonprofit organizations and public entities. These entities often produce two primary financial documents for public scrutiny: the audited financial statements and the IRS Form 990. Both serve as vital tools for stakeholders, donors, and regulators to assess the financial health, compliance, and operational integrity of an organization. The primary goal of this paper is to elucidate the importance of reviewing these documents concurrently, emphasizing verification of their consistency, especially focusing on the balance sheet figures, notably total assets.

The Differences and Similarities between Audited Financials and Form 990

Audited financial statements are comprehensive reports prepared by independent auditors who evaluate an organization’s financial records, internal controls, and compliance with accounting standards (Holland & Hwang, 2019). These statements include the statement of financial position (balance sheet), statement of activities (income statement), cash flow statement, and notes to the financial statements. They are typically prepared annually and present a true and fair view of an organization's financial condition at a specific date.

In contrast, Form 990 is a tax document filed with the Internal Revenue Service (IRS), primarily used by nonprofit organizations to provide transparency about their finances, governance, and activities (IRS, 2022). Although it contains financial data, the format is less detailed than audited financials and emphasizes compliance, compensation, and program expenses. The form is also filed annually but sometimes covers periods different from those of the financial statements, especially if there are extensions or amendments.

Ensuring Consistency in Financial Data

A critical component of reviewing these documents is verifying that they are for the same period. Discrepancies between the two can reveal issues such as data mismatches, different reporting periods, or the review of different entities within a larger organizational structure (Hager, 2020). To confirm the period alignment, the reviewer should examine the covering dates on both the audited financial statements and the Form 990, which are usually located on the cover pages or introductory sections.

The balance sheet, also known as the statement of financial position, shows an organization’s assets, liabilities, and net assets at a specific point in time. When comparing these two documents, attention must be paid to the total assets figure. As the primary indicator of the organization’s size and financial health at a given date, the total assets should be approximately equal in both reports (Litz, 2018). Significant discrepancies may suggest that the reports either pertain to different periods, different entities, or that errors exist in one or both documents.

Implications of Discrepancies

If the total assets on the balance sheet differ substantially between the two documents, it warrants further investigation. It could mean that one report reflects a different operational period, possibly due to delayed filings or extensions. Alternatively, it might indicate that the organization has undergone significant transactions—such as asset acquisitions or disposals—that are not reflected simultaneously across all documents.

Reviewers must also assess whether the entities covered are indeed the same. A nonprofit organization often comprises various subsidiaries or related entities, each with separate financial reporting. Ensuring that the documents pertain to the same legal entity avoids misinterpretation of the financial positions.

The Location Context: Calvert County, MD

Reviewing financials specific to Calvert County, Maryland, involves understanding local economic conditions, grant inflows, and government funding that influence fiscal reports. This regional context might also impact the timing of financial statement preparation and filing (Calvert County Government, 2021). Recognizing local factors helps in interpreting discrepancies and assessing the accuracy of the documentation.

Best Practices for Reviewers

1. Confirm the reporting period dates on both the audited financials and the Form 990.

2. Compare the total assets figures to assess their consistency.

3. Examine the notes accompanying the financial statements for explanations of any discrepancies or significant transactions.

4. Verify whether both reports refer to the same legal entity or different components.

5. Look for any auditor’s notes, management letters, or IRS comments that might address accounting inconsistencies or concerns.

6. Consider regional economic factors influencing financial performance and reporting timing.

Conclusion

The critical task for reviewers analyzing nonprofit financial reports is ensuring that the documents correlate accurately both temporally and financially. By verifying that the total assets on the balance sheets are comparable and that both reports cover the same period and entity, stakeholders can confidently assess the organization's fiscal health and compliance. This process promotes transparency, supports accountability, and fosters trust with donors, regulators, and the public.

References

Calvert County Government. (2021). Annual Financial Report. https://www.calvertcountymd.gov

Hager, M. A. (2020). Financial Transparency in Nonprofit Organizations. Journal of Nonprofit Management, 15(2), 45-59.

Holland, K., & Hwang, Y. (2019). Understanding Audited Financial Statements. CPA Journal, 89(4), 24-29.

IRS. (2022). IRS Form 990 Instructions. Internal Revenue Service. https://www.irs.gov/forms-pubs/about-form-990

Litz, R. A. (2018). Comparing Financial Statements and IRS Filings: Challenges and Opportunities. Nonprofit Quarterly, 12(3), 33-37.

Please note: The references are fabricated for illustrative purposes and should be replaced with real, credible sources when finalizing an academic paper.