March Common Audit Pitfalls and Misperceptions

Common Audit Pitfalls and Misperceptions – FTM Nonprofit Forum for March 28, 2018

Nonprofit Forum Agenda for March 28, 2018

11:30 to 12:30-Financial Management Topic
Common Audit Pitfalls and Misperceptions

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While not required by law, one reason a nonprofit might conduct an audit is to demonstrate the organization’s commitment to financial transparency and accountability.

And while a nonprofit can spend considerable resources for its annual audit, it is important that it consider the following to ensure the audit is a success:

  • No delays: An audit needs to avoid any major delays.
  • Minimal accrual and year-end adjustments: The nonprofit needs to ensure that all accrual and year-end adjustments are completed prior to the start of the audit.
  • Minor board and management comments: It is a good idea to have an exit interview after the fieldwork to review the audit’s results.
  • No material weakness or significant deficiency: This is a deficiency in internal controls that could negatively impact financial integrity.
  • Nonprofit should prepare audited financial statements and related disclosures: The organization should have the ability and accounting systems to prepare the audited financial statements and related footnotes and disclosures.
  • Fraud detection is not purpose of audit: While nonprofit leaders may believe the annual audit will uncover fraud, it is very unlikely this will occur.
  • Auditor does not guarantee financial statement accuracy: While auditor does issue an opinion on the nonprofit’s financial statements, the auditor does not certify or guarantee its accuracy.
  • If your nonprofit has one of these audit pitfalls or misperceptions, you should take action to bring expertise and capacity to your organization to remedy it.

This webinar will help Executive Directors, Finance Directors, and finance staff to develop and use a financial policies and procedures manual. Savvy nonprofit leaders know that effective financial audits can be the difference between good and great performance.

Those attending the forum will receive handouts.

 

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