Learn about the financial responsibilities of a non-profit.
An accountant can review a non-profit’s financial statements to ensure they fairly and accurately represent the non-profit’s finances. Some categories of non-profit society are required to have an accountant under the Societies Act.
Accountants’ reports are intended to help non-profits detect fraud.
The Societies Act has different categories of non-profit society with different financial reporting requirements. To answer this question you will need to know the sources of funding the non-profit receives.
A contract for services is when there is an oral or written agreement for your non-profit to pay a person or company for performing a service (e.g. employment agreements, professional services, cleaning contractors, etc).
A contract for services is when there is an oral or written agreement for your non-profit to pay a person or company for performing a service (e.g. employment agreements, professional services, cleaning contractors, etc).
Remuneration is when a non-profit gives money to its directors for being a director (e.g. wages, honoraria).
Remuneration does not include gifts (i.e. small, irregular tokens of appreciation).
Remuneration does not include reimbursing a director for expenses caused by being a director (e.g. travel to a meeting).
If a non-profit pays its directors for being a director (e.g. wages, honoraria, meeting fee), then the financial statements must disclose the amount. Directors cannot be remunerated unless the bylaws allow.
If the director is paid for services to the non-profit other than being a director, that also needs to be disclosed.
The non-profit can cover a director's expenses caused by being a director, such as travel to a meeting. That is considered reimbursement, not remuneration.
Financial statements are a broad overview of the non-profit’s financial position, presented for member approval at each AGM.
Financial statements generally include four documents: