Audits Of States, Local Governments, And Non-Profit: Fill & Download for Free

When a nonprofit organization or an NGO accepts a federal grant, it usually must comply with Circular A-110 “Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations”. It is a 54-page document and a dense read for most people. Non-compliance risks revocation of the grant award.https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-110.pdfThe organization must also comply with federal cost principals, in accordance with Circular A-122 “Cost Principles for Non-Profit Organizations.” It is a 55-page document that goes into great detail and might be challenging to completely understand if not an accountant. Non-compliance risks revocation of the grant award.https://www.whitehouse.gov/sites/whitehouse.gov/.../circulars/A122/a122_2004.pdfThe organization often must undergo a financial and compliance audit, at its own expense. The audit must be in compliance with Circular A-133 “Audits of States, Local Governments, and Non-Profit Organizations.” It is a 33-page document, and a difficult read for anyone who is not an experienced auditor or accountant. Non-compliance risks revocation of the grant award.https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A133/a133.pdfIn addition to the above documents, the federal agency that awards a grant may have its own circulars with its own rules. For example, grants awarded by the U.S. Department of Justice are usually subject to the DOJ Grants Financial Guide, which is a 164-page document. Non-compliance risks revocation of the grant award.https://www.whitehouse.gov/sites/whitehouse.gov/.../circulars/A122/a122_2004.pdfSome offices within federal agencies issue additional rules for grants they award. For example, the Office of Justice Programs, within the U.S. Department of Justice, offers a web site of links to rules and regulations to which its grant recipients are subject.https://ojp.gov/funding/Explore/LegalOverview/MandatoryTermsConditions.htmEgregious actions that are contrary to these rules can potentially result in arrest of the perpetrators, a criminal trial, and imprisonment.Finally, when a federal grant award is accepted, information on the grant is generally available to the public.https://www.usaspending.gov/#/

There are 4 sections:Financial Accounting & Reporting (FAR)Business Environment and Concepts(BEC)Auditing (AUD)Regulation (REG)1. Financial Accounting & Reporting (FAR)FAR imparts the knowledge and skills required by the Financial Accounting and reporting frameworks used by business entities both public and non-public, not for profit entities and state and local government entities.The frameworks that are mainly tested on the FAR exam section include· Financial Accounting Standards Board (FASB)· Governmental Accounting Standards Board (GASB)· International Accounting Standards Board (IASB)· American Institute of Certified Public Accountants (AICPA)· U.S. Securities and Exchange Commission (U.S. SEC)Content and WeightageConceptual Framework, Standard-Setting and Financial Reporting: 25- 35%Select Financial Statement Accounts: 30- 40%Select Transactions: 20- 30%State and Local Governments: 5- 15%2. Business Environment and Concepts(BEC)BEC imparts the knowledge and skills that help perform· Financial reporting· Audit, attestation, accounting and review services· Tax preparation· Other professional responsibilitiesWith the knowledge and use of internal control frameworks, enterprise risk management framework, regulatory frameworks and laws such as Sarbanes Oxley Act 2002 along with the knowledge and skills in many other areas.Content and WeightageCorporate Governance: 17- 27%Economic Concepts and Analysis: 17- 27%Financial Management: 11- 21%Information Technology: 15- 25%Operations Management: 15- 25%3. Auditing (AUD)AUD imparts the knowledge and skills that help perform· Audits* of issuer and non-issuer entities including governmental entities, not for-profit entities etc.· Attestation engagements** for issuer and non-issuer entities including examinations, reviews and agreed-upon procedures engagements· Preparation, compilation and review engagements for non-issuer entities and reviews of interim financial information for issuer entities*Audit Engagements include the financial statement audits, compliance audits, audits of internal control integrated with an audit of financial statements and audits of entities receiving federal grants**Non-audit Engagements or Attestation engagements include examinations, reviews and agreed-upon procedures engagements, Accounting and Review Services engagements (including preparation, compilation and review engagements) and reviews of interim financial informationContent and WeightageEthics, Professional Responsibilities and General Principles: 15- 25%Assessing Risk and Developing a Planned Response: 20- 30%Performing Further Procedures and Obtaining Evidence: 30- 40%Forming Conclusions and Reporting: 15- 25%4. Regulation (REG)REG imparts the knowledge and skills that help perform· U.S. federal taxation· U.S. business law· U.S. ethics and professional responsibilities related to tax practiceContent and WeightageEthics, Professional Responsibilities and Federal Tax Procedures: 10- 20%Business Law: 10- 20%Federal Taxation of Property Transactions: 12- 22%Federal Taxation of Individuals: 15- 25%Federal Taxation of Entities: 28- 38%This should help the aspirants in planning and preparing for the US CPA exams in a much better manner. Happy Learning!!!

Compared to the USA, China has very little debt. The Bank for International Settlements gives the following figures for 2015 and 2016:As you can see, most of China’s debt is money China’s government owes to itself and can write off whenever it chooses. But why would it so choose? After all, China’s government debt is very profitable. A St. Louis Federal Reserve paper estimated that the return on its debt pays dividends of 200–300%: "Is Government Spending a Free Lunch? -- Evidence from China – Federal Reserve Bank of St. Louis Working Paper. Xin Wang and Yi Wen:Perhaps even more exceptional is Chinaís extensive use of government spending as a major policy tool to stimulate the economy over the past three decades. Based on both aggregate time-series data and panel data from 29 Chinese provinces, we find that the fiscal multiplier in China is larger than 2. We provide a theoretical model with market failures and Monte Carlo analysis to rationalize our empirical findings. Specifically, we build a model that can generate the same multiplier and business cycles observed in China and use the model as a data-generating process to gauge whether structural vector autoregressions can yield consistent estimates of the theoretical multiplier in short samples. Our analysis supports the large multiplier found in China but also suggests that government spending may not necessarily be a free lunch despite the large multiplier. We show that (i) government spending in China Granger-causes output and investment booms as well as ináation, and (ii) it has a multiplier close to (or larger than) 3. The large multiplier e§ects are found not only in aggregate time series data but also in panel data at the provincial level. We provide a theoretical model with market failures and Monte Carlo analysis to rationalize our empirical Öndings. SpeciÖcally, we build a model that can generate boom-bust cycles and multiplier e§ect similar to those observed in China, and use the model as a laboratory (data generating process) to gage whether structural VARs can yield consistent estimates of the theoretical multiplier in short samples. Our Monte Carlo analysis supports the large multiplier found in China.Even The Wall Street Journal says not to worry: “China has few of the common risk factors for financial crises. Its current account surplus is 2% of GDP, external debt only 10% of GDP, foreign exchange reserves at 40% of GDP, and a fairly valued if not undervalued currency. Similarly, with below-normal loan-to-deposit ratios of 70% and minimal dependence on flighty wholesale funding, China's banks are highly liquid. They are not particularly vulnerable to a U.S.-style freeze of the interbank lending market. The economy also continues to be buffered by the highest national savings rate of any major economy. And even after accounting for the recent surge in local government liabilities, the government has a relatively healthy government balance”.Yukon Huang, the World Bank’s country director for China (1997–2004), who has also held positions at the U.S. Treasury and various universities in the United States, had this to say several years ago and it’s still true:“China doesn’t fit the stereotype of a nation set to undergo a Western-style financial crisis as the indebted companies and banks are all state-owned.The high corporate and local government debt levels in China have sparked concerns about an impending credit crisis in the world's second largest economy. Chinese corporate debt, for instance, is the highest in the world. At the end of 2013, it was estimated by the credit rating agency S&P to be around 14.2 trillion USD.Furthermore, the easing of the credit conditions following the 2008 global financial crisis and the subsequent boom in construction and asset prices have also triggered talk of the country experiencing a property bubble, whose bust may have disastrous consequences.Despite all this, Yukon Huang, economist and China expert at the Carnegie Endowment for International Peace, says in a DW interview that China doesn't fit the stereotype of a nation set to undergo a Western-style financial crisis as the indebted companies and banks are all state-owned.DW: Many analysts argue that the country may be headed for a debt crisis. Are there signs of an upcoming wave of insolvencies of Chinese firms?Yukon Huang: Many people feel that China is heading for a debt crisis. I believe that the country faces a difficult situation, but it doesn't fit the stereotype of a nation which is set to undergo a debt crisis. China actually faces a problem in the area of corporate debt, which as a share of the nation's GDP is one of the highest in the world.But it doesn't have any problems in terms of government or household debt.Even in the corporate sector, most firms in China don't have any issues. The vulnerabilities lie mainly within a small group of large state-owned enterprises (SOEs) which has over-extended and accumulated large debts.However, these debt problems aren't the same as in the West as these companies are all not only owned, but also backed by either local governments or the national government, meaning that the state is ultimately responsible for the debt. This is why it is unlikely for these SOE's to trigger a cascading debt problem similar to that in Western economies where private companies have a debt servicing problem.What about the local government debts then?While local governments borrowed a lot over the past eight years, an audit focusing on their indebtedness concluded that this was not a pervasive problem. And as for the localities which do have issues, either the provincial governments or the central government will have to bail them out.The key question is whether the central government has the resources to handle the debt problems of some of these corporations and local governments. And the answer is yes. Beijing has almost four trillion USD of reserves and its overall government debt level as a share of GDP is low.China actually saves more than it invests; it is one of the few countries where the savings rate is higher than the investment rate. Moreover, the country is still generating substantial balance of payments surpluses. China therefore doesn't fit into a stereotype of a country in a financial crisis.Where did China's current financial problems originate?The problem in China is that the fiscal system is weak. Local governments therefore borrow from the banking system to fund investments in a host of areas ranging from roads and power plants to health and education. As a result, the banks get involved in infrastructure financing which in turn increases the financial risk. In Western economies, when there is a financial crisis, we think the problem lies in the banking system. But in China, the problem really lies in the fiscal system.You argue that distorted incentives have spurred the growth of both shadow banking and a property boom in China. What are implications of such factors for the economy?First of all, every country has a shadow banking sector. But the interesting thing in China's case is that the sector only showed up in the past seven years. Since then, it has become quite significant and accounted for around half of the credit expansion.But the overall size of shadow banking in China is just a fraction of what it is in other countries. We generally don't consider shadow banking to be a problem in the West. In New York and London, for instance, financial systems are essentially composed of shadow banking; with all the hedge funds, investment banks and trust companies, among others.But it is important to understand why this sector only came into being a few years ago. The answer to this is that much of the shadow banking is linked to property development and the country did not have a private property market a decade ago.When a private property market emerges, a lot of credit financing is generated as the market revolves around assets and property development. In most countries, it's a good thing as a nation will not be able to develop a market for assets without it.But at the same time, it's also new and risky in the sense that people are unfamiliar with the market. So there needs to be more regulatory scrutiny. But the risks associated with shadow banking in China are relatively small compared to the situation in the West.What impact will these problems have on China's economic growth, which has slowed down in the past couple of years?The problem is that China is dealing with overbuilding in the property sector. So if the authorities let the market forces play, they have to stop building properties for a year or two and allow the demand to catch up with supply. I would say that China's growth rate should go further down for it to be sustainable, probably close to 6-6.5 percent.If the government then introduces appropriate reforms, it can probably push growth back up to 7 percent, may be even 7.5 percent, for the rest of the decade and beyond. But that implies the implementation of basic structural reforms as outlined in the third plenary session of the Communist Party's Central Committee.It is a widely-held belief that China's economy needs to grow at a rate close to 7.5 percent to generate enough employment opportunities. In this context, what impact will a drop in expansion to around 6-6.5 percent have?It's a strange belief. There are very few countries whose economies can grow at a rate of six percent. And in most economies expanding at a four percent rate, unemployment is a non-issue. So the interesting question is why China needs to grow at 6 or 7 or 8 percent, in order not to have an unemployment problem. The answer is that it simply doesn't need to.Actually, China has a shortage of labor. Wages have been increasing at an annual 10 percent rate for over a decade. So the issue raised by those - including the government - that China has to grow at such a fast pace due to unemployment concerns is overdone.The situation in China today is vastly different from that some ten years ago. Back then, state enterprises were shedding workers and at the same time, many were migrating to the cities. As a result, the labor force grew at about four percent a year and the economy therefore had to grow at an annual rate of nine percent to absorb the increasing number of workers.But today there is no need for such high growth rates due to a shrinking labor force. A five to six percent growth rate should prevent high unemployment and still allow substantial increases in wages.If we look at the other side of the ledger, assets to GDP, we can see that there’s even less reason to worry:And detailed analysis of China's GDP indicates economy is actually 15% larger than official figures. If that’s true, then China’s debt to GDP ratio would be greatly improved.Finally, China’s economy is growing 300% faster than America’s and 3000% faster than Japan’s, and growth eats debt.