Frequently Asked Questions
Q. What is GCAS?
A. GCAS stands for General Conference Auditing Service. Its responsibility is to audit, or arrange for the audits of, all organizations world-wide that are affiliated with the Seventh-day Adventist denomination. In addition, it conducts compliance tests of denominational policies, trust operations, and other regulatory requirements. It is an organizationally independent audit function that complies with generally accepted auditing standards, except for the potential impairment of the appearance of independence related to the denominational relationship. It reports on whether church entities have prepared financial statements essentially in accordance with generally accepted accounting principles and complied with denominational policies.
Q. What is the purpose of GCAS?
A. The purpose of GCAS is to perform structurally independent financial statement audits of the highest quality, at minimum cost, of all Seventh-day Adventist organizations worldwide. Except for the issue of "perception of independence" as discussed below, we are required to comply with generally accepted auditing standards, to function with professional independence and to comply with the highest professional and ethical standards. We do not offer our services to the general public as firms in public practice do; however, the professional relationship that we have with organizations affiliated with the Seventh-day Adventist denomination is virtually the same as if we were in public practice. We do not perform internal or operational audits for these organizations.
Q. Is GCAS independent of its clients?
A. The GCAS Board is comprised of a majority of lay church members and is elected to a five year term by representative from the worldwide church membership. The General Conference of Seventh-day Adventists (GC) is the worldwide coordinating body for the Seventh-day Adventist denomination. This denomination is a collection of separate legal entities which share similar goals, missions and purposes. The organizations are legally separate and distinct not-for-profit organizations with their own boards of directors which exercise autonomy and operate independently from the GC. GCAS auditors are independent of the entities audited because they are employed by, and their salaries are paid by, the GC and not by the entity being audited. Thus, except for the fact that GCAS auditors do not hold themselves out to the general public as independent accountants in public practice, our relationship to Seventh-day Adventist organizations approximates that of an independent public accountant to its client. It could be argued that GCAS is more independent than a public accounting firm which receives profit directly from its client, because we escape possible pressures or the financial impact that might result from losing a client.
GCAS auditors have no authority over clients. We are not members of any administrative committee or board. We can only make recommendations in a report to management or modify our opinion on the financial statements of the client organization, based on our findings during the audit. The Seventh-day Adventist organization being audited cannot dictate or influence auditors' findings and performance, or the conclusions expressed in the auditor's report.
Professional standards define independence as being both independent "in fact" and "in appearance." Because we are employed by the General Conference of Seventh-day Adventists and audit organizations affiliated with the Seventh-day Adventist denomination, we recognize that there may be a question regarding our "appearance" of independence. Therefore, we present our opinions as "internal auditors of the General Conference of Seventh-day Adventists". While we are internal to the Seventh-day Adventist denomination, and specialize in the auditing and financial reporting needs of the Seventh-day Adventist church, we are "in fact" independent of the entities we audit.