GOVERNMENTAL AND NOT-FOR-PROFIT
ACCOUNTING AND AUDITING
2nd Edition
Susan P. Convery
Cambridge Business Publishers
MODULE
1
Introduction
to the Governmental
and Not-For-Profit
Environments
©Cambridge Business Publishers
Acronyms!!
 GNP
 NFP
©Cambridge Business Publishers
3
Learning Objective 1.1
 Describe where government and not-forprofit (GNP) topics are tested on the CPA
exam and at what level.
©Cambridge Business Publishers
4
LO 1.1 GNP Topics on the CPA Exam
Let’s look at The American Institute of CPAs’
website: www.aicpa.org.

What are the four parts of the exam?

What topics and skills are covered on each part?

Are any changes planned for the exam?
©Cambridge Business Publishers
5
LO 1.1 CPA Exam
©Cambridge Business Publishers
6
LO 1.1 Parts of the CPA Exam

FAR Financial Accounting and Reporting

AUD Auditing and Attestation

REG Regulation

BEC Business Environment and Concepts

Check the most current “Blueprint” for the GNP topics
covered on each part of the CPA exam
©Cambridge Business Publishers
7
LO 1.1 Other Useful CPA Exam Resources
Boards of Accountancy

in the state in which you plan to sit for the exam or
practice as a CPA. Michigan is at www.michigan.gov,
the Department of Licensing and Regulation.
National Association of State Boards of
Accountancy

www.nasba.org. Processes applications and provides
FAQ and links to state boards.
©Cambridge Business Publishers
8
Learning Objective 1.2
 Distinguish among the business, not-forprofit (NFP), and public sectors of the
U.S. economy.
©Cambridge Business Publishers
9
LO 1.2 Three Sectors of the US Economy
Assets minus Liabilities =
Learning Objective 1.3
 Describe accounting and financial
reporting standards-setting.
©Cambridge Business Publishers
12
LO 1.3 Standards-Setting Table 1-2
©Cambridge Business Publishers
13
Learning Objective 1.4
 Explain the objectives of financial
reporting for each of the standardssetters.
• FASB
• GASB
• FASAB
©Cambridge Business Publishers
14
LO 1.4.1 FASB Concepts Statement No. 4
Nonbusiness entities provide info that is useful to:

Make resource allocation decisions

Assess the ability to provide services

Assess management’s stewardship of assets and
performance

Provide information about economic resources,
obligations, net resources, and changes in them
©Cambridge Business Publishers
15
LO 1.4.2 GASB Concepts Statement No. 1
State and local governments provide info to:

Compare actual financial results with the legally
adopted budget

Assess financial condition and results of operations

Assist in determining compliance with finance-related
laws, rules, and regulations, including the budget

Assist in evaluating efficiency and effectiveness
©Cambridge Business Publishers
16
LO 1.4.3 FASAB Concepts Statement No. 1
Federal government and its agencies provide
information to help users evaluate:

Budgetary integrity

Operating performance

Stewardship

Adequacy of systems and controls
©Cambridge Business Publishers
17