5 Values and principles governing an ABC

5.5. Not-for-profit operations

Forming an ABC as a non-for-profit organization communicates that the audit is not a means of making money and profits, but is truly a service to the media industry, and the free market more generally. This non-profit foundation inherently places trust as a guiding operation principle for an ABC. Of course, this doesn’t mean that an ABC should not plan budgets and operate to brek even in its works. It has to have enough revenues via membership and audit fees and other services such as research to fund itself. The non-profit basis means that the focus is on delivering the best service to its customers.

If the execution of a particular year’s audit bureau plan and operations generates net revenues, these excess funds should be reinvested in the next year’s budget. The net revenues can also be used to induce more membership by reducing memberhsip fees.

One benefit of the not-for-profit operations is that the price of providing the service is the lowest possible, since it doesn’t have to generate net profits for its members.

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