Nonprofits More Familiar with Sarbanes, Survey Says

Awareness in the nonprofit sector of the Sarbanes-Oxley Act has jumped in the past year, meaning nonprofit organizations are familiarizing themselves with the act, says one new study of 700 of the nation’s nonprofit groups.

According to an article in the South Florida Business Journal, the study by Grant Thornton, International, says 83 percent of survey respondents in the nonprofit sector say they are either "very familiar" or "somewhat familiar" with the act. That number is up from 56 percent in 2003.

"This increased awareness and action is, no doubt, the result of board members, governmental entities and other constituencies requiring enhancements in governance, operational and fiscal matters," Frank Kurre, managing partner of Grant Thornton's national nonprofit practice, told the publication.

Not only that, the report says 48 percent of respondents say they have made changes to their corporate governance policies as a result of the act, and 84 percent of respondents say they have an audit committee, up from 77 percent in 2003.

The survey also found that while nonprofits are not currently required to have a financial expert serve on the audit committee, 82 percent of respondents say their audit committee does include some sort of financial expert. Only 15 percent of respondents, however, say they made any changes to the makeup of their audit committee post-Sarbanes-Oxley.

As for their relationships with their external auditors:

• 46 percent said they have put their audit engagement out to bid within the past two years.
• 54 percent said they meet with their external auditor only once a year
• 38 percent said they meet with their auditor two or more times a year
• the chief executive officer or chief financial officer still selects the auditor at 36 percent of organizations.
• the audit committee selects the auditor at 30 percent of nonprofits surveyed
• the board of directors selects the auditor at 26 percent of nonprofit organizations surveyed.

To read the full article, click here: http://southflorida.bizjournals.com/southflorida/stories/2004/11/15/daily29.html