From Auditor to Advocate: My pathway to supporting Non-Profit Organisations

When I began my career as an auditor, I trained and qualified in London, specializing in insurance. Working in the non-profit sector was the last thing on my mind.

After a number of lucky chances (being in the right place at the right time), I found myself in 1999 working for KPMG in Vietnam as an auditor and training manager. I was about to move to Bangkok to lead KPMG’s training team, when the senior partner called me: did I want to go to Laos and develop the small office that KPMG had recently established? The chance of running an office – especially in a place that most of my family and friends had never heard of – was too good to miss, and I found myself based in Vientiane for the next three years. I soon discovered that the easiest (if not the only) way to grow the practice was to focus on the non-profit sector; I also found that I really enjoyed working with that sector and I have focused on it for the rest of my career.

As an auditor in the non-profit sector, one of the first things that struck me was the lack of international financial reporting standards, leading to a complete lack of consistency in reports.  At times, this could be quite liberating: I was constantly having to fall back on first principles when assessing whether financial statements were reasonable.  But the disadvantages far outweighed the benefits: in particular, each donor had its own specific reporting requirements, and NGOs and projects were having to prepare multiple sets of reports to satisfy different donors.  Two examples stand out:

• One May, I went to audit a project managed by an international NGO, and found that the same accounts had already been audited three times that calendar year – once by the internal audit team, again for a statutory audit, and a third time for another donor; and
• On another engagement, I was asked to help an NGO, one of six international NGOs funding a project managed by a local Vietnamese NGO. Each of the seven NGOs had different reporting standards and requirements; I needed to reconcile them and advise the international NGOs whether the Vietnamese accounts were consistent with their own standards.

The lack of consistent reporting has made it more difficult – and more expensive – to manage NGOs and their projects.  International standards exist but they are focused on businesses (IFRS) or government (IPSAS).  They can be used by NGOs and projects, and I came across a number doing so – but they are not 100% suitable.

When IFR4NPO started, I was therefore delighted that a major gap was going to be filled.  Although I was no longer auditing NGOs, I was happy to contribute to the initiative.  And now that I have joined the Governance Group, I am looking forward to increasing my support.

Mark Jerome is an Audit, Risk Management and Capacity Assessment specialist. He is also a member of the INPAG Governance Group.