Financial audits for nonprofits.
Annual financial statement audit engagements scoped to what your stakeholders and funders require.
18+
years of nonprofit-exclusive practice
500+
nonprofit clients served
60+
nonprofit professionals
95%+
client retention rate
The highest level of assurance.
An independent audit provides the highest level of assurance on an organization’s financial statements and brings credibility to its financial reporting. We conduct financial statement audits, Yellow Book audits under Government Auditing Standards, and other audits based on applicable reporting and compliance requirements.
What triggers a nonprofit’s audit requirement?
Board policy, funder grant agreements, and state charitable solicitation regulations are the three most common triggers. The specific threshold or requirement varies depending on which applies, and organizations frequently carry more than one. A board may adopt an audit policy at a lower revenue level than the state requires, or a major funder’s grant agreement may specify an audit independent of what state law mandates.
Organizations that have never been audited before often discover the requirement only when it can no longer be deferred: a new grant agreement specifies an independent audit, annual revenue crosses a state regulatory threshold no one was tracking, or a board member asks why the organization has never obtained one. Starting the conversation before the requirement becomes urgent gives the organization time to scope the right engagement rather than scramble into the first one available.
What types of audit engagements does this cover?
Financial statement audits.
The most common nonprofit audit type. Independent testing of your organization’s complete financial statements resulting in an audit opinion. This includes annual audits for established organizations, audits for nonprofits with complex multi-source revenue structures where contribution versus exchange transaction classification requires careful judgment, and the standard engagement most boards and funders expect.
Yellow Book audits.
Required when Government Auditing Standards apply, typically because the organization receives state or local government funding that specifies this standard. A Yellow Book audit includes everything in a financial statement audit plus additional compliance reporting. This audit type is often a funder requirement rather than an organizational choice.
First-year audits & auditor transitions.
First-year engagements carry distinct planning requirements. Whether your organization is obtaining an independent audit for the first time or transitioning from a prior auditor, the opening-year engagement includes additional procedures around opening balances, predecessor auditor communication, and establishing the baseline that subsequent audits will build from.
Consolidated & affiliated entity audits.
Organizations with subsidiaries, affiliated entities, or related foundations require audits that account for intercompany activity and consolidation adjustments. The engagement is scoped to address the specific relationships between entities rather than treating each in isolation.
Benefit plan audits.
Audits of employee benefit plans under ERISA requirements, including defined contribution plans and health and welfare plans. Benefit plan audits follow their own set of reporting standards and are typically required once a plan exceeds the participant threshold, separate from the organization’s financial statement audit.
Interim audit approach.
For larger engagements or organizations with tight reporting deadlines, we can perform certain audit procedures during the year and complete the remaining work after year-end. Spreading the work across the audit cycle eases the concentration of work after year-end and supports faster completion of the final report.
What is the difference between an audit, a review & a compilation?
These three services represent different levels of assurance. The distinction matters because a funder or lender requiring an audit will not accept a review or compilation as a substitute. Confirming which level your stakeholder requires before an engagement is scoped prevents the most avoidable and most frustrating planning error.
|
Service |
Assurance level |
What it involves |
Typical use |
|---|---|---|---|
|
Audit |
Highest: independent opinion |
Independent testing of financial statements against GAAP |
Required by funders, lenders, or state law; board governance best practice |
|
Review |
Limited |
Inquiry and analytical procedures without independent testing |
Smaller organizations without a specific audit requirement, needing more than a compilation |
|
Compilation |
None |
Financial data presented in statement form without assurance |
Organizations needing GAAP-format statements without external assurance requirements |
How does a financial statement audit engagement work?
01
Risk assessment & planning.
We begin by understanding your organization, its operations, financial reporting, internal controls, and the risks that shape the audit. That understanding drives our audit strategy, timing, and areas of focus.
02
Timeline & coordination.
We establish the audit timeline, information needs, and key milestones upfront. For larger or time-sensitive engagements, certain procedures may be performed on an interim basis to spread the workload and support timely completion after year-end.
03
Fieldwork & testing.
We perform risk-based audit procedures and testing appropriate to the engagement. Potential issues are communicated as they arise, giving management an opportunity to provide context and additional information before the audit is finalized.
04
Report delivery.
We deliver the draft audit reports to management, reviewed for clarity before they reach your board.
05
Board presentation.
We present findings directly to your board or audit committee, translating technical audit language into what the board needs to understand and act on.
Nonprofit audit fluency as baseline.
Eighteen years of auditing nonprofits exclusively means FASB ASC 958 net asset classification and functional expense allocation are baseline fluency on every engagement. Every auditor on the team works in them daily. A generalist audit team splitting attention between for-profit and nonprofit clients does not build the same pattern recognition around donor-restriction testing, contribution-versus-exchange-transaction judgments, and the specific way nonprofit financial statements need to map to Form 990 reporting.
That depth also shows up in how we scope engagements. Organizational structure, affiliated entities, funding sources, and stakeholder requirements can all change what an audit needs to cover. Whether that means a consolidated audit, a Single Audit, a program-specific audit, or another reporting requirement, we identify those considerations early and build the engagement around what is actually required.
Related services.
Grant & compliance audits.
Single Audits under Uniform Guidance, program-specific audits, and other grant and compliance audits, from determining the applicable audit requirements through testing and final reporting.
Internal controls.
Assessment and design of the controls that protect your books, reduce fraud risk, and hold up under audit testing.
Compliance & governance.
Structured support for your board’s fiduciary role: audit committee design, financial literacy programming, and governance policy alignment.
Form 990.
Full-return preparation and public-facing review of the filing that donors, journalists, and rating agencies can search.
Confirm which audit your organization actually needs.
If your organization is approaching its first audit, transitioning auditors, or unsure which audit type its funding profile requires, a partner is ready to make that determination before anything else is scoped.