A non-reporting entity is an entity which is not required to prepare financial statements to report the results of their operations. However, some of these entities still prepare financial statements. A reporting entity prepared a general purpose financial reports which must comply with all requirements of accounting standards. On the other hand, a non reporting entity does not follow any standard as to the preparation of their financial statements. In this case, the main purpose of a non-reporting entity preparing a financial statement is to give information related to the results of their operations to interested parties. These include current donors, potential donors, beneficiaries and others. This purpose is quite similar to the reason why a reporting entity prepares its financial statements. The only difference is that non-reporting entities are given flexibility as to how they would present or issue their financial statements. 1

Answer rating: 100% (QA)

Youve summarized the distinction between reporting and n... View the full answer