A Perfect Storm: A Case in Nonprofit Financial Reporting

This case provides an opportunity to examine numerous issues related to financial reporting for nonprofits, including the usefulness of generally accepted accounting principles, the level of assurance provided by an audit, the importance of each of the three basic financial statements and notes, and the financial reporting requirements for nonprofits. We specifically highlight the function of the media in financial disclosure for nonprofits. Students are able to see firsthand the type of financial reporting that may result if GAAP is not followed and there is no audit. Moreover, students have the opportunity to learn how incomplete financial reporting affects the relationship between stakeholders and administrators in a nonprofit environment. The case centers around actual events that occurred in the Roman Catholic Archdiocese of New Orleans from 2001 to 2009, and therefore provides a realistic learning environment. Finally, the case provides students the opportunity to engage in role-playing as financial managers and stakeholders.