Tips for a Successful Nonprofit Audit
Preparing for your not-for-profit audit might seem daunting. Here are a few tips you can use to help the process go smoothly.
Start planning early
Spend adequate time preparing for the audit before it starts. Take the time needed to prepare and organize supporting schedules and reconciliations that will be requested during the audit. Make sure to schedule time before and during the audit to communicate with the auditor and people inside your organization who will be involved in the audit.
Assess changes
Consider the impact of any programs your organization may have started or discontinued this year. Perhaps you received a significant new grant with additional reporting requirements. Did you bring in new people in leadership positions? Or make changes to your internal controls? These are all examples of changes that may trigger changes to accounting or auditing procedures and should be discussed with your auditor as early in the process as possible.
Think about experiences of prior audits
For organizations that have gone through an audit before, consider the issues that came up during prior years. Were audit adjustments to the financial statements required? Did the auditors make recommendations to improve your internal controls? Were there any issues that came up during last year's audit that present an opportunity for improvement this year?
Ask questions
Ask the auditor if anything on the request list is unclear before fieldwork starts. If you’re not sure why the auditor needs a certain item, don’t be afraid to ask for clarification or challenge it if you think an alternate path would yield acceptable results. You know your organization and your systems better than anyone else, so you may be able to suggest a different report or procedure that would give the auditor what they need while reducing the workload on your team.
Schreiber Accounting and Advisory has significant experience with nonprofit financial statement audits, reviews, and compilations; as well as Form 990 preparation and management advisory services for not-for profit organizations. If your organization needs the assistance of a qualified CPA firm, contact the firm for more information.
Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.