Understanding these aspects of nonprofit audits highlights their importance in maintaining transparency, accountability, and legal compliance within the sector. To achieve this, it’s essential for nonprofits to consider utilizing specialized nonprofit accounting solutions, which can help streamline financial processes and enhance accuracy. Baker Tilly US, LLP and Moss Adams LLP are licensed CPA firms that provide assurance services to their clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. Investment advisory offered through either Moss Adams Wealth Advisors LLC or Baker Tilly Wealth Management, LLC.

Cost Effective Non-Profit Audits

By assessing risk carefully and developing a plan for addressing it, nonprofits can help protect against errors or misstatements while also maintaining their reputation with donors who trust them with their donations. Through careful planning and effective risk assessment strategies, organizations are better equipped to deliver accurate financial reports while remaining compliant with all reporting standards. Based on their evaluation of these risks, auditors should be able to develop a plan for addressing them in order to minimize any potential impact on the operations of the nonprofit organization. This will involve creating controls or procedures to ensure that corrective action is taken should any issues arise during future audits. In addition, proper documentation should be maintained in case further evidence is needed by auditors at a later date. Where I sit as an auditor, I never get a good sense that these questions have are answered.

• Dedicated audit preparation comes with our standard bookkeeping and accounting services for mid-sized to large nonprofits and is available as an add-on for small organizations.
• For the purposes of this article, we’ll primarily focus on independent financial audits—just don’t be surprised if your nonprofit undergoes one of the other types at some point.
• The Sarbanes-Oxley Act requires publicly traded companies to rotate lead auditors — not necessarily audit firms — every five years.
• One of the challenges in nonprofit work is the distance between those paying for the services, the donors and those receiving the services, the clients (check my recent blog post on this).
• Under generally accepted accounting principles, a financial statement audit must be performed by a qualified CPA.
• If any CPA out there is looking for a change, I think you’d be pleasantly surprised by the folks at J&J.
• “Independent” refers to the fact that the auditor/CPA is not an employee of the nonprofit but instead is retained through a contract for services, and hence is “independent.”

Effective Time Audits: Boosting Business Success

• Partner with the experts at Jitasa to make the most of your nonprofit audit experience.
• This involves an on-site visit by an IRS agent to discover where and how financial information is maintained.
• Was it for the unsavory feeling of making exorbitant profits like Shylock, the Semite he abhorred?
• It also makes the case for a regular independent audit to flush out issues in advance of an initial contact letter from the IRS.

Form 990 is an annual information return required for tax-exempt organizations. accounting services for nonprofit organizations The reporting phase ensures transparency and provides actionable insights for enhancing financial accountability within the organization, reinforcing donor trust and regulatory compliance. By taking a proactive approach and staying informed, nonprofits can navigate the complex audit requirements of 2025 and ensure their organizations remain compliant and accountable. For example, nonprofits receiving $750,000 or more in federal funding annually are subject to a Single Audit under Uniform Guidance. Similarly, many states require audits for charities that surpass a certain revenue or contribution threshold.

Respond to Management Letters

From establishing goals to reporting findings, there is an organized process that should be followed to ensure accuracy and efficiency when conducting the audit. Many leaders today regrettably pay lip service to goals around culture, compliance and internal controls, but they lack the resources to support it. Where is the culture budget, the compliance budget – how does our annual budget reflect commitment to stewardship.

Jacobson Jarvis is the most experienced and exclusive accounting firm for nonprofits. Contact us to get access to year-round communication and expertise in nonprofit accounting. We take time to get to know our clients during the planning stage of the audit, so the remaining stages of the process are performed as quickly and smoothly as possible. When the audit report is complete, we will explain what is working for your organization and what areas need improvement.