Minutes
The
meeting was called to order at 9:10 AM.
OPENING
AND INTRODUCTION – The chair of the Audit Committee,
Allen Fetterman, asked the attendees to introduce themselves.
REQUIRED
COMMUNICATION - Edward Martin of Richard A. Eisner &
Company, LLC, reviewed the handout related to the required
forms of communication and the highlights of the audit of
consolidated statements.
ASSETS
- A general review of the financial statements was made
by Julie Floch of Richard A. Eisner & Company. The following
observations were noted: (1) the nature, classification,
and prior year reporting of investments and what falls into
the definition of cash and cash equivalents was raised by
Mr. Fetterman, and (2) the significant reduction in accounts
receivable compared to last fiscal year was highlighted
by Ms. Floch. Lynn Chambers explained that the investment
in question was money market funds. After extensive discussion,
the committee unanimously agreed to change the classification
of $2.1M from long term investments to short term investments.
Ms. Chambers also said that the decrease in accounts receivable
occurred because the dues statements were mailed a month
earlier in 2001 than in 2000.
LIABILITIES
- Ms. Chambers informed the committee that the amount for
deferred revenue will increase by $155.4K, and the revenue
in Foundation for Accounting Education will decrease by
that amount. Louis Grumet commented that the change occurred
because the AM4 Membership computer system and the Great
Plains Accounting computer systems were not integrated.
REVENUES
- Mr. Benjamin inquired about the definition of Public Relations
Revenue, suggesting that it be redistributed to identifiable
programs. It will be reclassified in the second draft, and
Trusted Professional revenue will be shown as a separate
line. The committee further agreed that Royalty Revenue
should be reported under Other Revenue.
EXPENSES
- Mr. Benjamin inquired about the specific reason for reporting
Bad Debt as a separate line item. Ms. Chambers replied it
was shown separately to emphasize that the Society had netted
an amount equal to the budget before bad debt expense was
recorded. The committee suggested that bad debt expense
be folded into the body of the statement as part of Management
and General.
Ms.
Floch noted that Eisner is more comfortable with the expense
allocation process this year than last year.
POLITICAL
ACTION COMMITTEE (PAC) - The committee discussed adding
PAC to the consolidated financial statements of the Society.
Mr. Grumet informed the committee that the financial statements
of PAC are not combined with Society based on a recommendation
by outside counsel. In order to make a more informed decision,
Mr. Fetterman asked for all relevant legal documents, including
the by-laws and/or the Articles of Incorporation. Mr. Grumet
said he would make copies of all legal documents available
to members. Mr. Grumet also said he would re-visit the issue
and all legal ramifications.
CAREER
OPPORTUNITIES IN THE ACCOUNTING PROFESSION (COAP) -
Mr. Grumet gave a brief overview of COAP's activities. Ms.
Chambers noted that the fiscal year 2000 interest income
for scholarship was credited to COAP incorrectly, and the
fund balance was overstated on the financials for 2000 and
2001. This error will be corrected in the second draft.
SUPPLEMENTAL
SCHEDULES - Mr. Fetterman noted that most not-for-profit
organizations have eliminated supplemental consolidating
data schedules from published financial statements. His
motion to eliminate all such schedules except the current
year’s schedule of activities was seconded by Mr. Riley.
The motion carried 4 – 1. Mr. Benjamin entered a motion
to eliminate all 2000 schedules while keeping all current
year’s schedules, and Mr. Riley seconded the motion. The
motion was defeated 4 – 1. The committee agreed to make
the recommendation to the Executive Committee.
GENERAL
- Mr. Martin went through the management letter observations.
Mr. Fetterman suggested two wording changes, which were
accepted. Ms. Chambers agreed to overnight copies of the
revised financial statements on Friday to members of both
the Executive and Audit Committees. Mr. Fetterman and members
of the committee met separately with both the staff and
Eisner personnel for a brief period of time. It was noted
that the 401K Plan was audited by Eisner. Mr. Grumet suggested
a teleconference for further discussion about issues related
to the 401K Plan and CPA Candidates.
RECOMMENDATION
- Mr. Riley's motion to accept the consolidated financial
statements, subject to the above revisions, and the management
letter was seconded by Rosemarie Barnickel, and passed unanimously.
There being no further business, the meeting adjourned at
10:55 AM.
Respectfully
Submitted,
Mondy
S. Gold
Approved
by the Audit Committee on 11/28/01
