Last week CPA firms and nonprofit finance and accounting professionals from across the country descended on our nation’s capital to attend the annual AICPA Not-for-Profit Industry Conference.
Given so many recent regulation changes – between the Affordable Care Act (ACA), audits, the Financial Accounting Standards Board (FASB), and more – it wasn’t a surprise to find so many sessions focused on understanding the changes and overcoming their challenges.
Here are a few quick takeaways and trending topics from an industry rookie and her yellow lined notepad:
1. Integrated and/or Impact Reporting – An undeniable trend and challenge facing nonprofits and their finance teams is the demand for impact reporting. With government funding levels still low, and much of funding for nonprofits nationwide turning toward donations and fundraising, donors are demanding to see more reports on where their donated dollars are going and metrics on mission success. Keynote speakers spoke about the importance of thinking about reporting in a strategic and integrated way, citing GE as a great example of an entity introducing integrated reporting into its annual report from the 2015 fiscal year.
2. The Cloud and Security – The cloud IS NOT going away, this is indeed where technology is going. The question is no longer, “Are you going to the cloud?” But, instead, “WHEN are you going to the cloud?” A session put on by Grant Thornton really broke it down best. Now that we understand the cloud is the future, what should you know and what questions should you ask to ensure your data and precious cargo is accessible and secure? Here are just a few things to consider when it comes to your third-party cloud vendor:
- Their own controls are efficient and meet the requirements for audit standards and the SSAE 16 report
- Their understanding of your specific and unique regulatory requirements
- Location of where your data is stored (What state? What city? What country?)
- What steps do they take to mitigate the risk of an outage? Should an outage occur, what is their own disaster recovery plan?
- What happens if you want to switch vendors or you want your data back? What is the protocol?
3. Single Audits – Quality and oversight have been a heavy focus for the EAQ initiative led by the American Institute of Certified Public Accountants (AICPA). From peer reviews to single audits, quality and effectiveness within the audit process are of paramount concern as we close out 2016 and head into 2017. For many organizations, the role of technology will be more important than ever – as sustaining proper internal controls and laying the groundwork for complete audit trails will mean the difference between sub-par and passing audits.
4. Tax Updates and Internal Controls – More than likely, we’ll start seeing tax reform changes in 2017, due to many impact factors. What all of those are, how they impact nonprofits, and what we can really expect will come to light over the course of the next six months.
5. Millennials – Millennials are the largest group in accounting today. As Boomers head toward retirement and Gen Xers look to take over these key leadership roles, the Millennial demographic will fill the junior and associate level positions at nonprofits and for-profits across the nation. There are many considerations and evolving leadership tactics as the profession progresses during this shift. Understanding how Millennials work, and taking advantage of their perspective, tech savvy, and hunger for innovation will be something to consider.