USA 990-EZ amend & Net Assets fix

[suiathon]

I started working with a nonprofit and their 990-EZ doesn't appear to have been correctly filled out for the past several years. Should I amend or just fill out correctly from now on? It's a small organization with less than $100,000 in receipts. Their beginning/ending balances never match to the prior year's 990-EZ and their end of year bank balance equals receipts which is not correct. They also show no expenses. My state has a 3 year statute of limits, which is extended to 6 for reasons I cannot remember right now.

Another questions - they have been making a journal entry at the end of each year to move net income back to the profit/loss statement. Obviously this needs to be fixed. How far back should I fix this issue, or can I simply just delete the entries they made on 12/2017 & 1/2018 and go on from there? I can adjust retained earnings accordingly. As an auditor, I'd normally fix the mistake at year-end, but in this case I'd probably fix it at month end. They don't use comparative statements.

Thanks!

 

[calzubi]

I was really hoping someone would have answered this. Very curious myself about what to do when you find out your org has been omitting and/or reporting incorrect numbers.

 

[kirby]

Once you are in charge of an organization's financial reporting, you have a responsibilty to ensure that financial reports you issue going forward or can amend ( if from the past and are materially wrong) are correct. Prior to doing so, get approval from mgmt so mgmt is not surprised by this.