What are the ethical responsibilities of a CPA who is the treasurer of a nonprofit organization?

Aug 05, 2016
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If a CPA is the treasurer of a nonprofit organization, are they still bound by the ethical requirements for professional conduct while doing nonprofit business? Are they bound to remain independent? Must they understand employment laws, specifically those involving discrimination? 

While I won’t pretend to know your specific circumstances, I offer the following thoughts and hope that they are of some help.

First, CPAs are bound by the ethical and professional requirements of the profession. The best practice is to assume that these standards always apply, regardless of whether an organization is a government, a not-for-profit entity, or a corporation. There may be different compliance and reporting requirements for each, but the question deals with ethical standards, and those are generally applicable. A not-for-profit status does not imply relaxed standards.

Second, the independence requirement depends on the nature of the services that this individual is providing in his or her capacity as treasurer. As a treasurer or board member, the individual is clearly not independent and should not be performing any engagements that typically require independence, such as audits and reviews. The revenue or legal status of an organization is generally not relevant to questions of ethical or professional standards.

Lastly, on the question of anti-discrimination and labor laws, it depends on the duties this treasurer is performing. Best practice is to become familiar with the information needed to perform one’s duties in a manner that allows the CPA to exercise competence and due professional care. This includes obtaining a working knowledge of pertinent laws and regulations, and identifying the need to enlist the help of an expert.
For more information, I recommend reviewing the regulations of the Pennsylvania State Board of Accountancy and the PICPA’s compliance library of resources.

Thank you for reaching out to the PICPA. We’re always here to help, and I hope the comments provided assist you in giving proper consideration to your situation.

Answered by: Alex Pabellon, CPA, is manager of accounting policy and SEC reporting at Customers Bancorp in Wyomissing, Pa.

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