This case provides an opportunity to examine numerous issues related to financial reporting for nonprofits, including the importance 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 of nonprofits. We specifically highlight the role played by the media in financial disclosure for nonprofits. In the for-profit accounting/auditing world, researchers have found that the media play a significant role as a monitor or “watchdog” for accounting fraud (Miller 2006).

We have used the case with graduate students in MBA accounting courses and with graduate students in a Master's of Public Administration accounting class. Both groups of students had received instruction in financial statement theory and preparation. This case could also be used in nonprofit accounting or advanced accounting undergraduate courses where financial accounting and reporting concepts are covered,...

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