Reviewed financial statements involve limited procedures for moderate assurance, while compiled financial statements are prepared based on information provided by the organization without any assurance. Adopting best practices can significantly enhance the audit process and the quality of audited financial statements. Effective financial management is the backbone of a thriving nonprofit, ensuring stability, transparency, and informed decision-making. Our free courses provide in-depth knowledge on key accounting principles, budgeting strategies, and reporting requirements to help your organization thrive.

Be selective in deciding which audit firms receive your RFP.

While not all nonprofits need an audit, many stand to benefit from some form of independent review by a CPA…and that doesn’t have to be an audit! Here are a few questions you can consider when you assess which service (if any!) is best for your nonprofit. All 501(c)3 nonprofits must publicly present their financial information in the form of a 990 tax filing. But at some point, newer or smaller nonprofits also need to address the question of whether to get an audit. With the right partner, it becomes a valuable tool for strengthening accountability and ensuring mission impact. Dimov Audit combines regulatory expertise, industry knowledge, and client-first service to make your audit experience clear, compliant, and confidence-building.

Need Help Preparing for a Nonprofit Audit?

Also, regular audits can help your organization receive more funds by encouraging accountability and transparency with your donor base. Additionally, refining your financial processes can make your nonprofit more attractive to corporate accounting services for nonprofit organizations sponsors and their workplace giving campaigns. Double the Donation’s workplace giving strategies guide explains that these programs are designed to positively impact all parties, including nonprofits, companies and their employees. This very thorough guide to independent audits from the National Council of Nonprofits connects with other resources from the Wallace Foundation and Propel.

Google Ad Grants: An In-Depth Guide

The primary purpose of a financial audit is to ensure that the financial statements accurately reflect the organization’s financial position and comply with applicable accounting standards. This process not only enhances the credibility of the financial reports but also instills confidence among stakeholders, including donors, board members, and regulatory bodies. In conclusion, navigating the complexities of nonprofit development requires diligence in financial management practices.

How to prevent audit misstatements by using fund accounting software.

To achieve that, many nonprofits undergo some level of financial examination from an independent auditor. However, nonprofit leaders are often uncertain about whether they need a full audit or if a review would suffice. Gain peace of mind on your nonprofit’s financial health and sustainability with Doeren Mayhew’s nonprofit CPA services. When it comes to managing your nonprofit, it’s important to focus on serving https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ your mission and achieving your organization’s greatest potential.

Federal Government Requirements for Nonprofit Audits

RFPs typically ask for names and bios of the audit firm’s engagement team, including partners, managers and staff accountants. State the purpose of the audit and why you are seeking an independent audit firm. Include a brief introduction to your nonprofit organization, its mission, size, and a brief overview of its activities and any related entities.

• It accurately reflects transactions in compliance with generally accepted accounting principles (GAAP).
• Risk assessment identifies and mitigates potential threats, such as dependency on funding sources or donor restrictions.
• For example, some states require nonprofit organizations to undergo audits, others do not, and some require audits only when an organization has exceeded a certain amount of revenue.
• It’s getting harder to find CPA firms that conduct nonprofit audits, and their schedules fill up quickly.

With proper planning, strong internal systems, and board involvement, audits can become opportunities for growth—not just obligations. Use them to reaffirm your organization’s commitment to integrity, transparency, and fiscal responsibility. A strong internal control system includes a clear organizational structure, competent personnel, and a commitment to ethical values. Risk assessment identifies and mitigates potential threats, such as dependency on funding sources or donor restrictions.