Much has happened in the ten years since Understanding Financial Statements was first published, not only from a financial reporting perspective but also from an economic, legislative, and social perspective. Governing board members are expected to know more and to do more than ever before. In the post-Enron, Sarbanes-Oxley-driven environment, trustees, like directors, are being held accountable - a key word in the new lexicon - for nearly everything that occurs under their watch, including changes for the better or worse in the institution's financial health.
Understanding Financial Statements is designed to help members of governing boards understand and properly interpret the institution's financial statements through the use of analytical tools and financial benchmarking. This edition also demonstrates how this information can be used effectively as part of the financial oversight increasingly demanded of the entire board and most specifically its finance and audit committees. A completely new chapter on the responsibilities of the audit committee has been added that identifies the key questions that board members should be asking and the role that financial statements offer in providing the answers to those questions. This edition includes a more robust data set so that the reader can see clear examples of financial trends and the impact of economic events on SanJo University, the hypothetical institution used throughout the text to demonstrate key lessons.