In partnership with Jefferson County, Mound City recently established a Native American Heritage Center and Museum, organized as a tax-exempt not-for-profit organization. Although the facility does not charge admission, signs at the information desk in the entry lobby encourage gifts of $3.00 for adults and $1.00 for children, 12 and under. Many visitors make the recommended contribution, some contribute larger amounts, and some do not contribute at all. Such contributions comprise 40 percent of the museum’s total annual revenues, with net proceeds from fund-raising events and government grants comprising the remaining 60 percent. The center operates from a city-owned building for which it pays a nominal $1 per year in rent. Except for a full-time executive director and a part-time assistant, the center is staffed by unpaid volunteers. The center is governed by a six-member board of directors, each appointed for a three-year term. Two of the directors are appointed by the Mound City Council, one by the Jefferson County Commission, two by the Mound City/Jefferson County Business Council, and one director is a Native American appointed by the local Tribe to represent Tribal interests. Should the center cease to operate, its charter provides that net assets be allocated as follows: all artifacts will revert to the local Tribe; of the remaining net assets, 25 percent will go to the city, 15 percent will go to the county, and the remaining amount will be donated to the State Historical Society.

At the end of its first year of operation, the board of directors decided to engage a local CPA to conduct an audit of the center’s financial statements. The board expects to receive an unmodified (clean) audit opinion stating that its financial statements are presented fairly in conformity with generally accepted accounting principles.

Required

Assume you are the CPA who has been engaged to conduct this audit. To which standards-setting body (or bodies) would you look for accounting and financial reporting standards to assist you in determining whether the center’s financial statements are in conformity with generally accepted accounting principles? Explain how you arrived at this conclusion.