ANNUAL Report

We each share a personal commitment to Christian Service!

Our attitude and actions incorporate integrity, respect, professionalism, & efficiency.

Presented at Annual Council 2013Silver Spring, Maryland, USA

TableOfCOnTenTsOur Shared MiSSiOnWe Serve GOd by deliverinG excellent audit ServiceS tO the

Seventh-day adventiSt church!

Our Shared valueSserviCe

We each share a personal commitment to christian service. our attitude and actions incorporate integrity, respect, professionalism, and efficiency. 4

6

10

12

13

14

16

17

18

20

i aM excellence!

excellence in learninG

excellence in livinG

Our reSpOnSibility

WOrk plan reSultS

Our reSOurceS

Our audit prOceSS

typeS Of repOrtS

analySiS Of repOrtS

eMerGinG iSSueS

We each eMbrace theSe valueS enablinG uS tO deliver excellence!

• Weareguidedbymoralandethicalprincipleswhicharereflectedinourconduct.

• WerespectGodbyhumblydedicatingourselvestoHim

• We respect our clients by valuing their opinions, understanding their needs,andsupportingtheirmission.

• Werespectourcolleaguesbyvaluingtheircontributions,understandingtheirneeds,andsupportingtheirprofessionalgrowth.

• Werespectourprofessionbyapplyingitsstandardsandbestpractices.

• Wedemonstrateacultureofhelpfulnessandcourtesybyourattitude.

• We develop our core competencies through a commitment to continuouslearningandobtainingthehighestlevelofprofessionalqualifications.

• We design our system of quality control to ensure our work complies withprofessionalstandards.

• Wedeterminetocommunicatevaluableinformationinaneffectivemanner.

• We are committed to conserving church resources by providing the highestqualityauditsatthebesteconomicalvalue.

inTegriTy

respeCT

prOfessiOnalism

effiCienCy

5 |

With this simple statement we havecrystallized how we learn and how welive. We believe that in our service toGod He demands our excellence; andinservicetoourclientstheydeserveourexcellence!

GCAS hasmade significant investmentsin providing learning opportunities forevery job level. Our learning programis centeredondeveloping a set of corecompetencies with a view of realizingexpectedoutcomes.Thesecompetenciesare a set of skills that create value inour colleagues and for our clients.Enhancingthesecompetencies iskey toourdeliveringexcellentservice.

Beyond serving the Church in aprofessionalcapacity,weencourageourcolleaguestoengageinpersonalministrywith their local churchandcommunity.Being the hands and feet of Christ is arewardingaspectofliving!Inconnectionwithour learning seminarswe setasidetime to be involved in communityactivities.

Aswelearnandlive,GCASisproudtoparticipate in the financial reportingprocess by providing excellent auditservices to the Seventh-day AdventistChurch.NowthatanewGCASFundingArrangement has been finalized withthe General Conference and WorldDivisions,wewillbeinabetterpositiontoaddressthecompleteportfolioofourresponsibility.

Our 2012 Annual Report provides aninsight on our professional activitiesby presenting the summarized resultsof audit engagements performed fromoffice locations around the world.These results were provided in detailtoChurchleadersandtheirconstituentstakeholders as part of administeringtheirrespectiveorganizations.

A special thank you is extended toour approximately 250 professionalsoperating from offices in 45 differentcountries who make DeliveringExcellenceoursignatureeveryday!

i am excellence!

Paul H. Douglas (Director) and Jack Krogstad (Board Chair) presenting

their respective Keynote and Welcome addresses during

CONNECT2013 in Riviera Maya, Mexico

OUR LOGO was created as a reflection of both the mission

and core values of GCAS.

The circular shape in the foreground, containing four

converging “hands” of varying colors, is a representation of the

convergence of four of GCAS’s core values - integrity, respect,

professionalism, and efficiency - into the singular value of service.

The circular shape is also a representation of the fact that

these values converge in the context of global service. The curving line that originates at

the GCAS initials and transitions to the circular shape in the

foreground represents the GCAS mission of delivering excellence

to the world church.

By Bbending excellence in learning

with excellence in living

we become People of Excellence

Daily demonstrating Christ in our professional

and personal service

Excellence is what we do!

Excellence is who we are!

Excellence is everything!

All because of Whom we serve!

6 | 7 |In My learning And In My Living - I Am Excellence!

By blending excellence in Learning...

 

• Orientation • Live Seminars • On-the-job

Training

Onboarding

• Self-Study • Webinars

Professional Examination • Live Seminars

• Webinars • Self-Study

Core Competencies

• Learning Modules

• Graduate Study

Specialization

excellence in learninG

Our Learning Model

GCAS values each of its professionalsandiscommittedtoprovidingarobustprofessional development programduringtheirtenure.Oursharedvaluesguide us to respect our colleaguesby valuing their contributions,understanding their needs, andsupporting their professional growth.Further, our shared values guide us todevelopthecorecompetencies**ofourcolleaguesbyprovidingopportunitiesforcontinuouslearningandsupportingtheattainment of the highest professionalqualifications. We believe that ourprofessional developmentprogramisintegraltoourbeingabletodeliverexcellent auditservices to theSeventh-dayA d v e n t i s tChurch.

The learning components of ourprofessional development programare designed to ensure that all of ourcolleagues possess competencies thatmake themwell rounded professionalsandpromotecontinuouslearning.

Our Learning Modes

GCAS delivers learning opportunitiesusing different modes such as liveseminars,webinars, self-study, and on-the-jobtraining.ThesemodescaneitherbeadministeredbyGCASfromitslibrary

of internally developed programsorfromenrollmentincoursesadministered by accreditedlearningorganizations.

EveryfiveyearsallGCASprofessionalsgatherfora global CONNECTc o n f e r e n c ewhich providesopportunity forcapstonelearning,strategic focus,andcollaborative

engagement.Themostrecent CONNECT took

placeinJanuary2013andthenextisscheduledforJanuary2018.

Between these quinquennial events,scheduled learning opportunitiesare designed to build and enhancethe five GCAS core competencies.Key components of these learningopportunitiesaretheseminarsscheduledby each GCAS geographicArea during the five-yearperiod.

The learning plan for each GCASprofessional follows a timeline thatmatchesourlearningexpectationswiththeir length of experience. Individualprofessional development plansare tailored to build individual jobcompetenciesateachprofessionallevel.The timeline focuses on four key areasforwhichlearningisdeliveredusingtheappropriatemode.

GCAS has been a NASBA CPE Sponsorsince 2005. NASBA is the NationalAssociation of State Boards ofAccountancy and together with theAICPAestablishesCPEStandardsforCPAs.

8 | 9 |In My learning And In My Living - I Am Excellence!

Service | inteGrity | reSpect | prOfeSSiOnaliSM | efficiency

CONNECT2013 Riviera Maya, Mexico

North America AreaTennessee, USA

Trans Africa AreaBloemfontein, South Africa

Trans America AreaFlorida, USA

Trans Asia Pacific AreaYu Chih,Taiwan

Trans Euro AreaHosur, India

eachyear. Forthosewhoarestudyingfor a professional examination orenrolled in a graduate study course,they are considered to havemet theirCPErequirementfortheyear.

Inaddition,eachprofessionalisexpectedto meet the CPE requirements in thejurisdictionoftheirspecificcertificationand/or licensure, as well as any CPErequirementsforspecializationssuchasCertifiedFraudExaminer(CFE)orTrustAuditor.

GCAS learning expectations includeCPE topic selection of relevance tothe auditors’ work location and clientbase. Learning expectations arecommunicatedaspartoftheonboardingprocessandarean integralpartof thepersonal professional developmentplancollaborativelydevelopedbetweenthe employee and regional manager.These plans are then reviewed as partof the annual employee performanceevaluation.

GCAS’ CPE requirement matches thehighest standards of the accountingprofession and is consistentwithwhatis needed to maintain licensure andremainontheleadingedgeofwhattheprofessiondemands.

Delivering excellent audit services tothe Seventh-day Adventist Church isdependentoneachGCASprofessionalpossessing the requisite competenciesto perform at the highest professionalstandards.

Qualifying organizations may applyto NASBA to become sponsors andare required to go through a rigorousevaluationprocesstoachievesponsorshipstatus. This NASBA CPE sponsordesignation allows the organizationto issue CPE certificates for continuingeducation programs. GCAS hasbeen authorized to provide CPE viathe live seminar delivery method, andmoving forward GCAS is applying forauthorization to add two additionaldelivery methods, group internet-based(GIB)andself-study (SS). Theseadditionaldeliverymethodswillfacilitatewider distribution and participationof the global GCAS community.

As a global community, GCASprofessionals hold various professionalaccounting certifications includingCertified Public Accountant (CPA),Chartered Accountant (CA), or ACCA(AssociationofCertifiedandCharteredAccountants)designations.GCASasanemployer is currently working towardsecuring the designation of an ACCAApprovedEmployer,whichwillfacilitateand streamline the ACCA certificationprocess.

Our Learning Metric

GCAS requires all of its professionalsto complete at least 120 hours ofcontinuingprofessionaleducation(CPE)every three years, and to complete aminimum of at least 20 hours of CPE

**

Able to utilize and leverage available technologies to complement audit

strategies, communicate with clients, and collaborate with colleagues

Client Satisfaction

Strategic & Critical Thinking

Accounting & Auditing

Technology

Able to give and exchange meaningful information with appropriate delivery and interpersonal skills. Able to influence and

inspire others to achieve results.

Able to anticipate and meet the changing and competing needs of our clients.

Able to link data, knowledge, and insight together to provide quality advice for

strategic decision-making.

Able to understand and apply relevant accounting standards. Able to design and

implement responsive audit strategies.

Expected OutcomesCore Competencies

Communication & Leadership

10 | 11 |In My learning And In My Living - I Am Excellence!

...with excellence in Living...

Want to receive these devotionals? Let us know at www.gcasconnect.org

The children at Sunshine consider each other as brother and sister!

excellence in livinG

GCAS understands the importance of excellence in every aspect of life. Weencourage our family to exemplifyexcellence in their living. How dowe corporately model this behavior?ThroughexCellenCeCOnneCTs,acorporateinitiative to nourish the spirit throughdevotion andprayer. The topof eachweek begins with a devotional andallows time for eachmember to stop,meditate,andpray. It isourhope thatthis inspires, throughthepowerof theHolySpirit,continualpracticeeachandeveryday.

As each embraces the power of theHoly Spirit, they are empowered toexemplify excellence in their livingthrough service. exCellenCeserves isdemonstrated through our membersserving their local congregations aselders,treasurers,deacons,deaconesses,and teachers. You may find themhelping their local church by workingonalambshelterandchurchbuildings,

mowingthegrass,orparticipatingasaguestspeakerforthechildren’sprogramatcampmeeting.ExcEllEncESErvES!alsogoes beyond the local congregation,many individuals have participated invariousmissionprojectssuchasbuildingachurchandinstallingwaterpumpsinPanama, evangelistic series presentedin the Philippines, church renovationsplus VBS for the village children inCatanduanes, and providing suppliesfororphanchildrenandpoorfamiliesatNakivalerefugeecampinUganda.

Corporately we also want to modelhow ExcEllEncESErvES! In January 2011,while attending the Trans Euro AsiaAreameetingsheldinBangalore,India,a group went to visit the Sunshine Children’s Home and School, anorphanage (today cares for over 100children) founded by Dorothy Wattsin1979,andactuallybeganoutoftheWatt’shome.

During our visit, we enjoyed musicperformedbythechildren,freshcoconutwater and wonderful conversation. Atour of the grounds provided a lookinto their daily activities and as such,many were touched by the wonderful

guidance that Beulah Fernandez, theSunshine Director, and other staffeffortlessly provide. As a result, anofferingwascollectedand thegiftwaspresentedtotheorphanage.

However, this is not the end of thestory.Duringthefollowingyears,manyof the attendees continued to supportthe orphanage through donations andsharing their experience with those,theycameincontact.InJanuary,duringCONNECT2013, GCAS corporatelyadoptedtheSunshineChildren’sHomeandSchoolasitsmissionproject.

Through the Sabbath offering andpledges the total amount collectedand sent was USD9,625 (Rs 584,943).Withthefunds,theSunshineChildren’sHomeandSchoolwillbeabletobenefitfromthepurchaseofsolarwaterheatersforthechildrenandatillerwithatrailertocultivatethe land. Inaddition,theywill be able to purchase enough painttocoveralltheresidentialbuildings,andenough supplies to repair all the leakyroofs.ComeJanuary2014,wewillselecta new mission project in a differentdivision and continue to minister andservewithexcellence.

Sung Hyo, Kim | Audit SeniorTrans Asia Pacific Area

Mission Trip to Elido, Philippine with the Saman Church in Korea.

“Along with my daughter, I had the opportunity to remember our

mission and service to others while we helped build the church and hold

evangelistic meetings.” Diane Baier | Administrative Assistant

North America AreaMission Trip to Panamá with

Chesapeake Conference“One of the important things I

learned was that even when we go out to do God’s work, we sometimes bring our own agendas and we have to let go of them and see God work.”

ExcellenceServes through Missions:

Annie Machamire | Audit Staff Trans Africa Area

Mission Trip to Zimbabwe with family.“There is no greater joy then to share

Christ with children and see them eager to learn and remember Bible verses.

12 | 13 |In My learning And In My Living - I Am Excellence!

Client Base—The General Conference Auditing ServiceshallbetheSeventh-dayAdventistChurch’spreferredproviderofauditingorfinancialreviewservices.The client base includes all denominational organizations such as GeneralConference institutions,world divisions and their institutions, unions/unions ofchurchesandtheirinstitutions,localconferences/missionsandtheireducationalinstitutions at the secondary level or higher, and Adventist Development andReliefAgencycountryofficesandprojectsnotauditedbyexternalauditors.

General Conference Working Policy SA 05 25

Our reSpOnSibility

Daily demonstrating Christ...

WOrk plan reSultS

Total Audits Audits Audits Assets Assets RevenuesType of Entities Portolio Completed In Progress Postponed Not Attempted Audited AuditedDivisions 13 13 758,000,000 315,000,000 Unions 121 94 9 18 1,287,000,000 416,000,000 Conferences/Missions 613 401 74 8 130 4,308,000,000 1,804,000,000 Educational Institutions 764 370 46 7 341 3,175,000,000 2,314,000,000 Healthcare Institutions 187 77 25 2 83 620,000,000 581,000,000 Publishing Houses/ABCs 225 123 27 2 73 370,000,000 170,000,000 ADRA 108 45 11 9 43 60,000,000 65,000,000 Trust 70 18 15 37Other 336 206 33 6 91 3,740,000,000 1,117,000,000

2437 1347 240 34 816 14,318,000,000 6,782,000,000

Analysis of Audits Work Plan Results

14 | 15 |In My learning And In My Living - I Am Excellence!

...we become People of Excellence!

Kirsten DunlopAustralia

Mo LealUnited States

Paul KluganGhana

Pinky Joy Jago-onPhilippines

Our reSOurceS

The engine for delivering excellenceisfueledbytherevenuewereceivefrombillingourservicestoclientsinNorthAmericaDivisonandtheallocationfromtheGeneralConferenceWorldBudgetforourservicestoclientsintheremainingworlddivisions.

We provide these services with a highly qualified team which is diverse in itscompostionanddedicatedtothecommitmentofobtainingthehighestprofessionalqualifications.

Our qualified team consists of 26% femalesand74% males.

Within this group62%areprofessionallycertified,and38% areworkingtowardscertification.

gCasBy the NumBersFunding Arrangement

2000Year GCAS organized as a global organization with funding based on a one-time reduction in appropriation to Divisions and GC assumes all audit costs.

62% Average number of audits completed based on a staffing level.

2014Year Cost Sharing plan between GC and Divisions for audit costs will begin.

80% Subsidy for audit costs of conference type of entities.

20% GC subsidy of audit costs of owned and operated type entities.

6.78% Annual World budget allocated to GCAS.

3The initial Memorandaum Of Understanding (MOU) signed between GC and Divisions will be for the period of three years.

63Number of new auditors needed worldwide based on a new financial agreement.

$6.6 Million Amount by which GCAS was underfounded and is now addressed by cost sharing plan.

16 | 17 |In My learning And In My Living - I Am Excellence!

typeS Of repOrtS

...in our Professional and Personal service!

Our audit prOceSS

Developandagreeonwrittentermsofengagementwiththeclient

Obtaininformationaboutclient’saccountingandfinancialreportingsystem

Designandperformauditproceduresbasedonassessedriskofmaterialmisstatement

Assesstheriskofmaterialmisstatement,whetherduetoerrororfraud

Analyzeresults,drawconclusions,andformanopinionaboutthefinancialstatement

Prepareandissueauditopinionandothercommunicationstoprescribedrecipients

AGREE

REPORT

CONCLUDE

ASSESS

PERFORM

OBTAIN

Standard/Unqualified

Theauditorconcludesthattheoverallfinancialstatementsarefairlypresented.

Qualified

Theauditorconcludesthattheoverallfinancialstatementsarefairlypresented,but the scope of the audit has been materially restricted or accountingreportingstandardswerenotfollowedinpreparingthefinancialstatements.

Adverse

Theauditorconcludesthatthefinancialstatementsarenotfairlypresented.

Disclaimer

Theauditorconcludesthatheorsheisunabletoformanopinionastowhetherthefinancialstatementsarefairlypresented,orheorsheisnotindependent.

Opinions

Policy Compliance

Standard/Unqualified

The policy compliance report does not mention any instances of non-compliancewithdenominationalpolicy.

Qualified

The policy compliance reportdoes mention instances of non-compliancewithdenominationalpolicy.

18 | 19 |In My learning And In My Living - I Am Excellence!

Policy Compliance Reports Issued

analySiS Of repOrtS

Types of Opinions Rendered

Total Assets Audited: $14,318,000,000

Total Revenue Audited: $6,782,000,000

MOSt frequent reaSOnS fOr a qualified OpiniOn:

• Notrecordingrealpropertybyproperorganization

• Impropervaluationofinvestments

• Stateoftheaccountingrecords

• Lackofevidencetosupportinventorybalances

• Unabletoverifyoutstandingitemsonaccountreconciliations

• Notdiscountinginterest-freeaccountsreceivablefromrelatedentities

• Unabletoobtainsufficientauditevidence

MOSt frequent WOrkinG pOlicy viOlatiOnS:

• Failuretoclassifyinvestmentassetsbasedonatimehorizon

• NotprovidingmonthlyFStogoverningboard

• MissingConflictofInterestStatements

• Employeeservicerecordsnotupdatedandsigned

• MissingorimproperlyconstitutedAuditCommittee

• Notperformingassetallocationstudyofinvestments

• Nottakinginsurancecoverageondenominationalproperties

• Inadequatesegregationofduties• Lackofauthorizationfortransactions• Lackofevaluationofallowanceofuncollectibleaccountsreceivable• Inadequatebackupdocumentationonexpensereport• Bankand/orinter-organizationalaccountsnotreconciled

• Impropercomputationoffairvalueofinvestments• LackofBoardauthorizationforopeningbankaccounts• Nophysicalinventorycount• Managementoverrideofinternalcontrols• Lackofapprovalofjournalvouchersbyresponsibleofficial

Most Frequent Internal Control Deficiencies:

Excellence is everything...

20 | 21 |In My learning And In My Living - I Am Excellence!

Excellence is what we do!

Excellence is who we are!

eMerGinG iSSueS 2012

GCAS Board Meeting during Annual Council 2011

GCAS Board members; Svetlana Kara (Euro-Asia Division), Evelyn Will (South Pacific

Division), Phillip Ndlovu (Southern Africa-Indian Ocean Division)

Professional Standards

Accounting for Leases

TheInternationalAccountingStandardsBoard (IASB) has issued an exposuredraftoutliningproposedchangestotheaccounting for leases. Under existingstandards, amajority of leases are notreported on a lessee’s balance sheet.The new proposal would require alesseetorecognizeassetsand liabilitiesfortherightsandobligationscreatedbyleasesofmorethan12months,therebycausingmostleasestobereportedonalessee’sbalancesheet.

Auditor’s Report

TheInternationalAuditingandAssuranceStandards Board (IAASB) has issued anexposure draft of proposed changesin the content of the auditor’s reporton financial statements, in an effort toimprovethatreport.Theproposalwouldrequire certain additional informationto be included in the auditor’s report.Thisincludesthereportingofthemostsignificantmatters during the audit to

be reported as “key audit matters,”the appropriateness of management’suse of the going concern basis ofaccounting, improved description ofthe responsibilities of the auditor, andthe name of the engagement partner.It isanticipatedthatthesechangeswillpositivelybenefitthequalityoffinancialstatement audits andusers’perceptionoftheaudits.

Disclosures about RisksBenefit Plans

International Financial ReportingStandards (IFRS) has expandeddisclosures requirements for employeebenefitplans to includemanagement’sconclusionsabout risks associatedwithparticipation inmulti-employer benefitplans, including the risk of liabilityfor contributions to cover benefitsfor employees of other participatingemployersinthegroup.

Denominational Requirements

Investments

At the end of 2012, the ExecutiveCommittee of the General ConferenceofSeventh-dayAdventistamended thedenomination’s investment policy torequire all affiliated organizations toengage theservicesofan independentcertifiedmanagementconsultanttoassistin thedevelopmentandmonitoringoftheinvestmentstrategies.Anadditionalamendment to this investment policywastorequireallinvestmentmanagersto meet high professional criteria,including an absence of a conflict ofinterest. These new requirements arestillbeingimplemented.

Financial Reporting

TheGeneralConferencereviseditspolicesto incorporatebestpractices relatedtothe receipt, response and resolutionofissuesidentifiedinauditreportsprovidedbyGCAS or by an external audit firm.Thisrevisionmadetopolicyisintendedto develop a common expectationof transparency and accountabilityfor all denominational organizations.Included in the revised policies areexpectations for each organization tohaveitsfinancialrecordscompletednolater than90daysafter thecloseof itsfiscalyear-end;havetheauditorissueafinal reportno later than60daysafterthe close of audit engagement; andhave each organization establish anaudit committee that is comprised ofmembersnotinitsemployment.

22 | 23 |In My learning And In My Living - I Am Excellence!

All because of Whom we serve!

CONNECT2013bOard MeMberS 2010 - 2015

NADLayRepresentative,Chair|Jack L Krogstad,PhDCPA

GCVicePresident,Vice Chair|Lowell C Cooper,MDivMPH

GCASDirector,Secretary|Paul H Douglas,MBACPA

GCPresident|Ted N C Wilson,PhD

GCSecretary|GT Ng,PhD

GCTreasurer|Robert E Lemon,MBA

ECDLayRepresentative|Vincent Zirimwabagabo,BCom

ESDLayRepresentative|Svetlana Kara,CCIM

EUDLayRepresentative|Elvira Grosu,ACCA

IADLayRepresentative|Hyden Gittens,M.ScCPA

NSDLayRepresentative|Yungsang Oh,M.ScCPA

SADLayRepresentative|Ailton Dorl,MBA

SIDLayRepresentative|Phillip Ndlovu,B.ScCA

SPDLayRepresentative|Evelyn Will,BA

SSDLayRepresentative|Lotie Ragas,MPACPA

SUDLayRepresentative|John Stanley,PhD

TEDLayRepresentative|Frensly Panneflek,MBAM.Sc

WADLayRepresentative|Philip Maitanmi,CA

leaderShip teaM

Director|Paul H Douglas,MBACPA

HQEngagements|John H Adu,MBACPACA

Employment&Budget|Linda E Fredlund,CAP-OMGPHR

Communication&Scorecard|Ludmila G Leito,BABS

ProcessImprovement|Jeremy T Smith,BACPA

ProfessionalDevelopment|Maurine Wahlen,MBACPA

ProfessionalStandards| Daniel E Herzel,BACPA

AuditMethodology|James E Trude,BSCPA

QualityControl|Kimberly Westfall,BBACPA

Opinions|Paul W Johnson,BSCPACFE

Technology|Gary B Blood,BSMCP

Area Offices

NorthAmerica|Robyn W Kajiura,BBACPA

TransAfrica|Furaha Mpozembizi,BComCAACCA

TransAmerica|Rogelio Cortez,BBACPA

TransAsiaPacific|Paul J Edwards,BBACPAACCA

TransEuroAsia|Sandra C Grice,MBACPAFCCA