Nonprofit Audit: In-Depth Guide to Audited Financial Statements

Your audit report will be most helpful to your nonprofit if you select an auditing firm with a strong track record that aligns with your needs and budget. Your organization’s Form 990 filing deadline https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ is the 15th day of the fifth month after your fiscal year ends (May 15 if your fiscal year follows the calendar year like most nonprofits). If you won’t have enough time to complete your audit, start incorporating the recommendations, and fill out the form by the deadline, you can file for an extension of up to six months via IRS Form 8868.

Tennessee: Joe C. Davis Foundation Grant

The more you plan ahead, the more likely you are to get on the schedule of your top choice for a new audit firm. Together, we can empower your nonprofit organization to achieve financial success, make a greater impact in your community, and secure a sustainable future. Don’t wait – contact us now and let JFW Accounting Services be your trusted financial partner. Schedule a consultation and let us help you navigate the complexities of financial management, strategic planning, and compliance. While one-off single audits are a great start, get on a regular cadence with annual audits. This isn’t a complete glossary of auditing and accounting terms, but it’s a good place to start.

• By prioritizing both accuracy in financial statements and thoroughness in disclosures, nonprofits can present a complete picture of their financial health during the audit.
• Provide contact details for any inquiries related to the RFP, such as a contact name, phone number and email address.
• Whether or not your nonprofit is subject to routine audits, you should keep a potential audit in mind at all times.
• Specialist nonprofit accounting software with audit automation capabilities can make sense of this entire operation by organizing documents, ensuring secure access, and tracking internal review processes.
• Audit fees can be significant for large nonprofits located in major urban areas.
• Yearly collections falling beneath $25,000 need not file any audited financial records.

Review the Audit Report Carefully

A proactive approach to document organization lays the groundwork for a successful audit and contributes to ongoing operational efficiency. Lewis.cpa is well-versed in making these financial reviews an asset for nonprofit concerns. We can walk you through the process for a nonprofit audit and ensure that you understand the entire process.

Does this checklist address compliance with nonprofit-specific accounting standards?

While most focus generally lies on federal and state income taxes, there’s also a third aspect—payroll taxes. One of our Classy experts will reach out to schedule a hands-on walk-through of the platform and demonstrate how our industry-leading solution can help your nonprofit reach its goals. Classy’s comprehensive fundraising platform offers unified giving tools that help optimize the donation process. In fact, 95% of Classy’s customers choose our platform year after year for the highest-quality solutions. Having a third-party perspective (someone paid to do the audit) accounting services for nonprofit organizations means you’ll receive objective advice from someone less likely affected by relationships or emotions.

Kristin Bakewell, CPA, CFE

Through careful planning and effective risk assessment strategies, organizations are better equipped to deliver accurate financial reports while remaining compliant with all reporting standards. In addition to this comprehensive audit checklist, you can reach out to the Charity CFO for help with audit preparation. We specialize in helping nonprofits with financial management–including audit readiness.

• A review points out issues with an organization’s finances and management’s response to those issues, without offering additional opinions, solutions, or comments.
• Adding an audit requirement to your organization’s bylaws may seem redundant for many nonprofits.
• They will look at any documentation provided by the nonprofit to ensure that it is accurate and complete.
• Understanding the audit process, the necessary documentation and the benefits of a thorough audit can help your nonprofit navigate audit season with confidence.
• The auditor you choose will have a big impact on the quality and actionability of your audit.

The goal is to provide reasonable assurance that the financial statements are free from material misstatements. When the Internal Revenue Service (IRS) audits a nonprofit organization, this happens under a narrow set of circumstances. A nonprofit financial audit by the IRS is initiated if a return appears to be wanting in accuracy or completeness, unsupported by the organization’s financial records. Another trigger could be notification by any number of other government agencies that the nonprofit organization has failed to operate in accordance with their rules for grant recipients. Furthermore, the division within the IRS that takes responsibility for IRS-exempt organizations is itself under review, requiring financial review of organizations under its purview.

Experience the Difference with A Top Nonprofit Audit Firm

Audited financial statements provide donors and grantmakers with confidence that their contributions are being managed responsibly and in accordance with donor restrictions. Auditors must also provide a detailed report outlining all findings and recommendations so that nonprofits can take appropriate action to address any issues uncovered during the audit process. This allows organizations to remain compliant while also giving donors greater assurance that their funds are being used properly and in accordance with stated goals and objectives. Off-the-shelf accounting software does not have the proper internal controls to meet this SAS requirement.