
The AMS’s status as a non-profit organization and relaxed oversight of AMS-authorized credit cards took centre stage in KPMG’s audit finding report.
The AMS and faculty societies gathered to approve audited financial statements for the 2022-23 year during the Corporate Special General Meeting on Nov. 21 in Mitchell Hall. All motions were passed.
CGSM approved the AMS annual report and hired KPMG as the auditor for the 2023-24 fiscal year. CGSM reappointed Joseph Villamizar as one of the AMS Board of Directors’ community directors for another three-year term.
According to KPMG’s audit findings report for the 2022-23 school year, the AMS is at risk of fraud when it comes to management of override control.
“Management is in a unique position to perpetrate fraud because of its ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively,” said the report.
To address this concern, auditors have specific procedures in place to alleviate the risk of fraud in the AMS’s financial reports.
The AMS may need to worry about their status as a non-profit organization, according to the report. The Canada Revenue Agency (CRA) could deem the AMS a fully taxable organization due to their significant net assets totaling $14.6 million for the 2022-23 school year.
READ MORE: AMS publishes commission budgets for 2023-24 year
The auditors clarified if the CRA observes the AMS turning a profit, they may consider the gains one of the reasons the organization could lose its non-profit status. To prevent this, auditors recommended the Board of Directors prioritize monitoring the financial position of the AMS as a non-profit organization.
Auditors found financial misstatements in AMS financial statements during the auditing process. Financial misstatements greater than $21,250 were recorded in the auditors’ summary of adjustments and differences. However, KMPG decided not to correct certain mistakes, as they weren’t significant enough to impact the accuracy of AMS’s financial statements. They had no influence on the auditors’ report.
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