Undergoing an Audit

Improving efficiency and promoting collaboration

When it’s time for the audit, your nonprofit will receive an auditor engagement letter or proposal for audit work and services.

This will outline what supporting schedules and documentation will be needed. While the audit is underway, your auditor (and their supporting team) will work onsite at your organization to review all the information needed to issue an opinion on your financial statements.

The auditors are likely to have regular conversations with your designated staff member to clear up any questions.

Here are some tips to ensuring a smooth audit process:

Ease-of-access is key—provide auditors the access they need
For first-year audits, ask to walk through a couple transactions with the auditor so they understand how to access information
- Attach supporting documentation at the transaction level
Be responsive to the auditor’s requests
Don’t guess—ask the auditor clarifying questions to confirm what is needed and why
Reduce the number of back-and-forth emails, where possible, by having in-person or virtual meetings
Pull in support from other teams as needed
Nurture the relationship with the auditor and trust them to evaluate your compliance

As the audit nears the finish line, these last steps will ensure you were a good partner to your auditor during the audit:

Check in with the auditor for a status update
Communicate any deadlines you may have to the auditor so they can finish on your schedule
Be mindful of outstanding items and provide them in a timely manner
Ensure you have a timeline on completion
Keep the board and audit/finance committee apprised of the project status
Decide if you want to have the auditor present when you present the financial statements to stakeholders

As they assess your organization’s financial position, auditors look at how much money comes in and goes out, and whether you handled it appropriately in between.