Q: What is an independent audit of a nonprofit?
A: An independent audit is an examination by a certified public accountant of the financial records and business transactions of a charitable nonprofit.
Q: Should I use a local auditor?
A: Most audits can now be done remotely. In fact, 100% of Community Auditors audits are done electronically. This means all our communication is handled over the phone and through email - we don’t have to come to your place of business. We use a secure online portal for easy upload of all required documents. This not only makes the audit process more efficient but also saves you money, because now you can choose a qualified auditor at a price you can afford without being limited to local CPA firms.
Q: Is there a different between an audit of a nonprofit and of a for-profit?
A: No, except that the board of directors of a charitable nonprofit has oversight responsibility for the audit function, whereas in some private businesses, there may not be a board of directors.
Q: Are there any alternatives to having an independent audit?
A: If an audit is required by law, there are no alternatives that will fulfill such a requirement. However, if a donor requests that the organization have an audit, the organization can request to have a review or compilation instead.
Q: Does my organization have to engage an independent auditor annually?
A: The National Council of Nonprofits has compiled a chart of the audit requirements for nonprofits in all 50 states to help you determine whether your nonprofit is required to complete an annual audit:
Disclaimer: this is not a substitute for legal advice.
Q: Can the CPA who does our taxes also do our audit?
A: Perhaps. Your CPA is a good place to start, but not all CPAs are auditors and not all CPA firms audit all industries. If you prefer to use a single CPA to do both your taxes and audit, make sure to clear this at the start of your search. Community Auditors is qualified to do both taxes and audits for most nonprofit organizations.
Q: Is there a benefit to paying more for an audit?
A: All auditors are required to follow the same standards. However, how they work with your organization is up to them. Some companies who offer lower prices may treat you like a commodity, making themselves less available to answer questions or guide new organizations along. Companies who are fully available to communicate at the drop of a hat, however, often come at a high price. At Community Auditors, we pride ourselves on finding the balance. We are selective in choosing which organizations we work with, so that we can guarantee, with a smaller client list, our time is your time. We also work to keep our prices competitive, so you don’t have to choose between quality and cost savings.
Q: Will I be able to work alongside the auditor we select?
A: Similar to above, this varies among CPA firms. Most importantly, you need to feel comfortable that you can bring concerns to your selected firm and confident in the guidance they are providing. Reviewing their background and qualifications is an important first step. However, you need to build trust during the interview process by asking to discuss the audit process, as well as what will happen if problems occur. We at Community Auditors value transparency. We can’t give you reassurance if we do not know what your concerns are. We never accept a job we feel incapable of fulfilling. Over communication is better than under communication.