What is an independent audit? This section will help you understand what an independent audit is, and what it is not, as well as what alternatives to independent audits exist.
Does your nonprofit need to have an independent audit? Not every charitable nonprofit is required to conduct an independent audit. Some nonprofits, because of the size of their annual budgets, or because of the sources of their funding, are required by state or federal law to conduct an independent audit. In other situations, a charitable nonprofit has a choice whether or not to conduct an independent audit.
State law nonprofit audit requirements: Learn about the audit requirements for charitable nonprofits in your state. This 50-state chart shows which state laws require a charitable nonprofit to conduct an independent audit.
Federal law audit requirements: If your nonprofit receives federal funding, whether directly or through a pass-through entity, it may be required to conduct an independent audit, even if otherwise state law would not require one.
Why a nonprofit might conduct an audit even when the law doesn’t require it.
Board's role and audit committees
A three-step approach to managing an independent audit. This section of the Guide will help you understand what happens before, during, and after the audit, and the roles that staff and board members play in the independent audit process.Step 1: Selecting an audit firm
Step 2: Preparing for the audit
Step 3: After the audit
Myth: Audits uncover fraud
Glossary
Acknowledgements
Financial Statement Audits: Assessing accuracy and reliability of financial reports.
Internal Controls Review: Evaluating financial management processes.
Compliance Checks: Ensuring adherence to IRS Form 990 requirements, grant regulations, and federal/state laws.
Fraud Prevention & Risk Assessment: Identifying potential financial mismanagement.