Sarbanes-Oxley asks the question: Is a particular accounting treatment not only permitted by standards, regulations, and laws, but is it ethical and does it results in accurate financial reporting? (United States Sentencing Commission, 2003)

The act requires corporations to establish audit committees, prohibits publicly audited clients from engaging an accounting firm that audits financial statements for non-audit services, and requires corporations to disclose all material off-balance sheet transactions.

While not regulated by the Sarbanes-Oxley Act, non-profit entities will also be impacted by the climate of scrutiny. There is no question t

 Ensuring that the Board has the necessary financial and accounting expertise to operate effectively.

(United States General Accounting Office, 1998)

Many of them believe however, that there should be special provisions in regards to their accounting practices. (Jeter, 2003) In most non-profit organizations, the Board of Directors is directly responsible for overseeing the financial reporting and audit process. In most situations, this responsibility is carried out through the audit committee.

hat non-profit organizations will be subject to increased public attention regarding their financial controls and ethical management. Mission-driven organizations want to avoid the spotlight on anything that would tarnish their reputations.

Some of the actions proposed items to be considered by the Board include:

The nature of significant business transactions and inherent risks

 Formalize policies regarding conflicts of interest, management policies and fiduciary responsibilities

Some topics in this essay:
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