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E A Lemoine

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Everything posted by E A Lemoine

  1. Commonly boards will use some board management software to provide all of the resources of organization in one centralized area so all members can collaborate with each other. Even though documents of the association are shared, it doesn't mean that any of this has context within a meeting. Without more of an explanation of how this is being used (or perhaps the type of service), any answer is going to be a guess at this point.
  2. As I'm not an attorney nor is this a forum for legal advice, I'd recommend seeking the advice of an attorney for your questions. But Robert's Rules is primarily geared towards non-profit entities. The principles and even the rules can govern for-profit meetings, but you have a lot of other applicable state/province rules, or in the case of a publicly traded companies, federal rules that would be of higher rank than the parliamentary rules prescribed by RONR. As RONR notes, those will always take precedence over the book. I'd suggest that the audit, as recommended in RONR, is still sound and relevant advice in 2016 as it would have been in 1916 or 1876, notwithstanding I didn't dig to see how far that language has existed in the book.
  3. Of course the treasurer is still relieved for errors, unless there was intent to deceive in which case that's fraud. Errors could be in the classifications of certain transactions (whoops, that wasn't membership dues, it was actually event income) or in estimates (we used an accelerated method of depreciation when we should have used the straight line method). Auditors never attest that books are "correct" or "accurate". In an audit, it's merely that in their opinion, the financial statements fairly represent the company in ALL MATERIAL RESPECTS. A review just means they are aware of NO MATERIAL MODIFICATIONS required to be in conformity with GAAP. There can still be errors. And more often than not, there are many errors except they are immaterial.
  4. So let me provide you the accountant's response to this being one of the few CPA's and professional parliamentarians out there... What is done with for-profit, publicly traded companies is very different than what happens in non-profit, non-stock corporations. Shareholders DO ratify the audit committee's decision about which independent CPA firm is used, but no they don't adopt the auditor's report seeing as they have no rights or obligations to do that. While some things fall onto the shareholders to make decisions, ultimately they aren't viewed as the governing body, the board of directors has most of the legal powers. And with respects to audits, for the most part the audit committee has jurisdiction over it seeing as they have independent charters granting them certain authority. But even they don't need to "accept" the auditors report per se, because the CFO/treasurer of a publicly traded company is an employee and they can fire him/her, sue him/her personally, and also because the CFO need to make certain attestations about the financials as required by law (as do all of the directors) -- so they're all pretty "active" in regards to what is going on in the organization. As noted by others above, in non-profit organizations, it's assumed that the members have those powers unless otherwise delegated to the board. Further, much of RONR has application in millions of organizations that are unincorporated where there is technically unlimited legal liability on each of the members of the organization. When you're incorporated you do at least get that legal protection as a member. But your average organization's treasurer is unpaid, not an employee, and while not always a check signer, is usually involved to some degree in the financial decision making of an organization. Adopting the auditor's report in a non-profit is very similar to saying "We, the members, aren't experts in financial matters, but we believe that Firm CPA are experts and trust their opinion, so we're comfortable with relieving the treasurer of liability except in instances of fraud." Now you may not have the resources to pay for an audit and one should then have some members perform a financial review, again, to look for the same thing. The intent here is to create a control to potentially mitigate fraud from occurring. Under the Model Nonprofit Corporations Act, members generally have the right to demand a copy of the annual financial statements, and if they are audited, reviewed, or compiled by a CPA, their report should accompany the financials. If the directors do not have financial knowledge themselves on the financial statements or financial data, they can rely on a director who is competent in this area or a CPA. One should be able to rely on the expertise of others, and knowing the board or members are placing that reliance on the expertise of others and relieving the treasurer of those obligations is helpful.
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