An overview and professional
opportunity in NPO Sectors



CA K. Reny Philip
Partner
Philips Cherian & Associates
EVOLUTION AND GROWTH OF
NPOS
 History of Indian NPO sector
 Evolution over the years and role of CAs
 NGO Sector
Professional opportunities of Chartered
Accountants in NPO sector.
 1. Consultants at the Conceptualization and formation stage of NPOs
 2. Statutory Auditors and Internal Auditors
 3. Auditors on behalf of donors and funding agencies
 4. Reviewers of Financial Management Systems
 5. Advisors on Financial Management and Systems
 6. Trainers / Resource Persons
 7. Finance Managers and CFOs
 8. Senior Management Team Members and CEOs
 9.
Members and / or Chairpersons of Advisory Bodies
 10. Lobbying or advocating for Accounting standards, laws etc
1.Consultants at the Conceptualization and
formation stage of NPOs
Conceptualizing – Deciding the form of organization of the charity on
the basis of need of the client and consistent with law of the land.
The decision also depends on various factors including
 Size of the Institution
 Legal requirement
 Initial Cost
 Recurring cost
 Compliance Required
 Corporate Structure
 Number of persons required to constitute
 Global appearance
 Advantages and disadvantages of deciding the form of
institution
 Characteristics
……….Consultants at the Conceptualization and
formation stage of NPOs
Contd……
 ii. Formation of organization - Drafting of Trust deed, Bye
Laws of Society, MOA & AOA of section 25/ section 8
company etc and registration
 Other services include applying for various statutory and
related registration
 a.PAN/TAN
 b. 12 A Registration
 c. 80 G Regn
 d.FCRA
 e. 35 AC
 f. Service Tax
 g. Profession Tax
2. As Statutory Auditors & Internal
Auditors of NPO
 In addition to the audit in respective laws of
incorporation , the major laws for which Audit is
applicable to NGO sector organisations are



Income Tax Act 1961.
Statutory Audit
44 AB Audit ( In case there is business turnover
beyond limits prescribed)
Foreign Contribution (Regulation) Act 2010
3. Auditors on Behalf of Donors
and Funding Agencies:
 An auditor has to peruse the DONOR-NGO agreement
to report on the compliance on the terms of the
agreement to the Donor.
 The auditor is asked by the donors to submit a special
audit report/utilization certificates to them in
addition to signing the financial statements.
4. Reviewers of Financial
Management System
 NGO sector organizations has to be of high standards
to meet the demands of the various stakeholders
 Expert help is necessary as both the international
agencies and the NGOs are interested in improving
the standards of accounting, financial reporting and
legal compliance aspects.
5.Advisors on Financial
Management and Systems:
 Donor agencies have several requirements in relation
to financial accounting and reporting when they
provide funds to the NGO.
 NGOs need good advisors on various financial
management and legal aspects for themselves, and
other organisations dealing with them.
6.Trainers / Resource Persons in
Financial
 The NGO sector staff, management team, board
persons and officer-bearers are mostly from diverse
fields and not necessarily experts on financial
management. Smaller NGOs find it extremely difficult
to get qualified persons for accounting and financial
management. Thus NGO staff requires a lot of training
in accounting and legal compliances. Even board
members need orientation on financial management
to play their role effectively as treasurers or members
of Finance Advisory Committee.
7.Finance Managers and CFOs:
 In larger NGOs, there is a great need for qualified
persons to occupy the positions of finance managers.
8.Senior Management Team
members and CEOs:
 In few national and international NGOs in the recent
past Chartered Accountants are selected for the top
positions.
 It is an interesting responsibility to lead a non-profit
organisation whose main goal is changing the lives of
people especially the downtrodden and the
underprivileged in society.
9.Member of Advisory Bodies: As the Boards and
Governing Bodies of NGO sector
 There is a good scope for Chartered Accountants to
become members of these Committees and play a
useful role. This role may be honorary but for those
who would like to contribute to the NGO sector, this is
a sure way.
 There is a great need for financial experts on the
Boards, Governing Bodies and Committees of NGO
sector organisations. Here Chartered Accountants can
play a vital role in the Governance .
10. Lobbying or advocating for
Accounting Standards, Laws etc:
 This is an emerging new role, which is a felt need for
NGO sector organisations. There is a great need to
lobby with the respective authority or the Government
Agency to amend the respective legislation or the
regulation which is adversely affecting the NGO sector.
An Untapped Area full of Professional
Opportunities
 special opportunities especially for smaller firms,
individuals and proprietorship firms of Chartered
Accountants
 Corporate social responsibility (CSR)
 Chartered accountants Network is an excellent way for
nation building