If you’re wondering how to get ready for a nonprofit audit, all you need to remember are the four W’s: Who, What, When and Where. These questions will help you prepare for your audit and keep everything on time and running smoothly.
Who?
Who is in charge of the audit? While you may have many different employees, board members, or volunteers who may need to be involved in the audit to some degree, it’s important to pick one person who will serve as your “audit captain.” This person will communicate directly with the auditors and oversee the submission of all requested documentation. If your audit captain is unable to handle a specific request, it’s their job to identify someone who can.
What?
What documentation do you need for the audit? Your auditors will ask you for many different financial documents, reports, and statements. This list of requested documents is generally known as a “Provided By Client” or PBC list. To prevent delays, you should make sure that your files are organized and easy to access. If you have not recently updated your internal control policy, we recommend doing this before the audit begins. You may also be asked to submit non-financial documents (such as your organization’s bylaws, board meeting minutes, or volunteer records) so it’s a good idea to give other departments a heads up about any items they may need to provide.
When?
When is the audit happening? Certain key deadlines must be met to maintain this timeline. If your organization is unprepared or unable to respond to our auditors in a timely manner, your audit may be significantly delayed. If your organization experiences any management changes, leaves of absence, or otherwise anticipates any difficulty meeting the agreed-upon deadlines, it’s important to communicate those concerns to your auditors right away.
Where?
Where will the audit take place? With Altruic Advisors, the vast majority of our work is done remotely. You will be asked to upload all requested items to our document portal and any questions or clarifications may be asked and answered electronically. There are only a few occasions where we may need to visit your office, such as fieldwork. However, even traditionally “on-site” activities like fieldwork may also be conducted remotely through video conferencing and digital access to your accounting records. Whether your organization prefers a fully remote audit or not, it’s important to discuss your expectations with your audit firm.