As was promised, this morning World Help released restated financial statements for their 2011 and 2010 fiscal years. A clean audit opinion is attached.
The financial statements contain an emphasis of matter paragraph in the opinion, revised income and expense amounts on the statement of activity, and a new note 11 describing the revision to the financial statements.
In terms of the speed which the organization revised their 990 & audited financial statements and made them available to the public, I’m impressed.
As a note to the rest of the R&D NPO community, this is an example of the speed with which it is possible to revise financial data. Your operating cycle is far faster than government agencies.
Auditing rules found in section AU 561 address how an auditor deals with errors in previously issued financial statements. The ideal way to handle it, if several major conditions can be met, is that
…disclosure should consist of issuing, as soon as practicable, revised financial statements and auditor’s report. The reasons for the revision usually should be described in a note to the financial statements and referred to in the auditor’s report. (AU 561.06 a)
As a note to the CPA community, it is actually possible to rapidly issue revised financial statements.
As an additional note to the CPA community, please observe this was carried out by a one-partner firm.
Other people will followup on the remaining issues, such as how management missed this material misstatement initially, how it was that the auditor did not detect it, how to resolve the reported allegation by two donors that an additional $250M of GIK over the last three years was not actually donated to the organization, and whether there are any other overstated GIKs.
In terms of delivering what was told to some reporters, the speed of revisions by management when they realized there was an error, the speed the external accountant moved, and following the pertinent audit literature, count me impressed.