When audit time arrives for your non-profit organization, you will want to be as prepared as possible to ensure that the process runs as smooth as it can. Remember, an audit is intended to aid you in your mission as it reviews the financial condition of your operation. The results of your audit and the steps you take because of them can greatly improve your fiscal standing and allow you to reach the various goals you have for the future of your organization. Also, the audit process strengthens the confidence of your donors and solidifies your stance in regards to compliance.
H&M performs a number of audits each year and we are happy to offer a few top tips for non-profits as they embark on the audit process.
1.) Documentation is key in all audit engagements. You won’t want spend time rushing around trying to gather all audit-related documentation when the time comes. Instill an organizational process that creates an organized and efficient audit trail makes providing documentation during audit time much easier. Try giving one staff member the on-going responsibility of maintaining the company’s records in an organized fashion. This will further the objective of having sufficient audit documentation when the time comes.
2.) Spend some time researching the details around your specific audit framework. This will help elevate some confusion about the process and give you enough insight to feel fully prepared ahead of the start of the audit. The more you know about your audit framework, the more you will understand what is being done once auditors arrive on-site to begin working.
3.) The goal of the auditor is to endure that your financial statements accurately reflect your current financial standing. To aide them in this process ahead of time, you should review financial records to make sure they line up with generally accepting accounting principles (GAAP). You can also look at how funds are flowing in and out of the door to make sure donor and grant money is being used as intended. Also take a look at your internal controls to make sure you are protecting your organization against fraud-related events.
4.) An important on-going tip…keep in contact with your auditor when new opportunities and events arise for your organization. This will allow the auditor to assist you in accurately recording these elements in an effort to cut down on stress and questions while the audit is occurring.
5.) Remember, your audit manager/partner maintains a constant wealth of knowledge in accounting, picking their brain about items you find difficult may result in streamlined processes. Don’t be afraid to ask questions.
For more information about preparing for your audit or for all of the services we provide to non-profit organizations, please contact us today. We would be happy to assist you.