Not-for-profit Financial statement audit: Frequently Asked Questions

Is your Not-for-profit preparing for a financial audit? Here’s a list of frequently asked questions.

What is an independent audit of a not-for-profit?

An independent audit for a Not-for-profit occurs when an external auditor – mostly a CPA firm – conducts a financial audit of your accounting practices and records.

What are the four financial statements required for all Not-for-profit entities?

  1. Balance sheet
  2. Income statement
  3. Statement of cash flows
  4. Statement of functional expenses

Which Type of Audit is conducted by a Not-for-profit Organization?

Generally, there are two types of not-for-profit audits, they are;

  1. External audit
  2. Internal audit


What is the Importance of Audits for Not-for-profit organizations?

Audits help to check the financial health of the organization. It also serves as proof of transparency to the grantors and other stakeholders.

Are there any Alternatives to Having an Independent Audit?

A not-for-profit that generates above $500,000 (depending on state and laws) must file an independent audit. However, you can conduct a financial statement review or compilation if the law allows it.

Need help?

Contact MetwallyCPA for a professional financial statement audit for a Not-for-profit


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