As your organization grows, it’s likely that you’ll need a financial statement audit. What can you expect from an audit?
First – Who does the audit?
Your board of directors will likely use an RFP process to find an outside, independent CPA firm with experience in nonprofit accounting, hopefully within your organization’s niche. A team of one senior auditor plus one or more audit staff will be assigned to handle the audit.
What do auditors do?
They get to know your organization before starting the audit, by reading and reviewing your organizational documents as well as discussing your internal procedures with you and your staff.
During the audit, they will test your financial statements and transactions to make su
re that you are following generally accepted accounting principles, that internal controls are reasonable, and that the statements reflect the reality of transactions of the organization.
Next time, we’ll learn 2 more things to expect during your financial statement audit.