Even if not legally mandated, it is advisable to perform regular financial audits to make sure there is strong financial management how to request an audit of a nonprofit and to maintain transparency with donors and stakeholders. By following this checklist, you’ll be well-prepared for your nonprofit audit, reducing the likelihood of surprises and ensuring a smoother audit process. Remember, the goal is to present a clear, accurate, and complete picture of your organization’s financial health to your auditors.
This means, that you actually shouldn’t charge the entire cost of the letter to fundraising, but also categorize a portion of the cost under program ledger account education. Our team of expert nonprofit accountants will prepare the necessary work papers and schedules for your auditor and coordinate with them to fill out your Form 990. We can also help you with your month-end close so you can stay audit-ready throughout the year. To help you navigate the audit process, let’s dive deeper into some of the steps we’ve presented here and provide some additional context that will help you take action.
An independent nonprofit audit differs from one executed by the IRS in several areas. The independent auditor is a professional CPA unrelated to the agency and is compensated by the audited firm. The audit is free of consultation with the IRS and devoted solely to evaluating internal controls and documentary accuracy. In the end, this accountant submits an audit report that details the investigative findings such as areas of strength, improvement, weakness, and danger. Whether you’re trying to meet government regulations or win over donors, an audit is a way to show that your nonprofit organization is responsible for its financial records.
Your board will give the auditing committee authority to oversee all audits, including hiring and evaluating an independent auditor. These improvements may involve fundraising opportunities you weren’t aware of and expenses you no longer need. An independent auditor can give your organization an outside perspective when you feel stuck. Adding an audit requirement to Accounting for Marketing Agencies your organization’s bylaws may seem redundant for many nonprofits. The additional cost to perform these audits may even feel improbable, but there are several benefits for nonprofits that perform regular internal audits.
By systematically evaluating security measures, identifying vulnerabilities, and ensuring compliance, organizations can significantly reduce their risk exposure and safeguard their critical assets. Continuous monitoring and improvement further enhance an organization’s security posture, ensuring ongoing resilience. By implementing these more specific and actionable best practices, organizations can elevate their cybersecurity audits from compliance exercises to strategic tools for enhancing security posture and mitigating risks.