financial reports


An excellent resource has recently been released by CPA Australia titled:  A guide to understanding the financial reports of not for profit entities.

As detailed in the introduction, the guide is intended for the external users of the financial statements prepared by not for profit entities such as members of your organisation, donors and funding providers.

Furthermore, it is also very useful for staff, volunteers as well as the committee of management to gain an understanding of the financial performance of the organisation.

Why this is useful for the range of stakeholders mentioned above is that it is not a technical document in relation to complex accounting principles but more about explaining the role of reports, what information they contain and importantly what it means.  For example, some of the key elements in the guide include:

  • A description of the different financial statements and the information they contain
  • The difference between cash and accrual accounting
  • An overview of the key elements contained in the financial reports
  • The role of the audit, annual report and other compliance and regulatory issues
  • How to read the financial reports and ascertain key information that they contain 

This guide can also be very useful to both existing and new members of the committee of management as it can be used to raise the level of financial knowledge and awareness and would also be ideal as part of any induction program.

This resource is also beneficial in relation to accountability and transparency of the committee of the management as it goes a long way to demystifying many of the aspects relating to the financial operations, management and reporting for your organisation.