What is a non-profit auditor?

In a nonprofit audit, a tax professional would examine your financial statements, business transactions, accounting practices, and internal controls. Just like a regular audit, nonprofit audits are complicated and confusing.

When should you perform a non-profit audit?

A non-profit audit should be performed when your organization wants to receive additional funding from the government, investors, and shareholders.

Performing an audit ensures that your organization is more transparent about how it spends its funds. Conducting an audit can be useful for ensuring that fraud is not occurring within the organization.

However, not every charitable non-profit requires an audit. Despite not being required to conduct an audit, non-profits should still consider doing so to ensure their financial records and internal controls are up-to-date and to identify potential areas for improvement.

How much does an audit cost for a non-profit?

Independent audits vary in cost based on the organization's size and location. For large non-profits in urban areas, audit fees can exceed $20,000. Even a small nonprofit can expect to pay $5,000- $10,000 for an independent audit.

The process of independent auditing is time-consuming. It usually takes 4 to 12 weeks to choose an independent auditor, 2 to 4 weeks to prepare for the audit, and 2 to 4 weeks to conduct the audit.

What are the 3 types of GAAS?

Generally Accepted Auditing Standards (GAAS) is a method for auditing private companies. Non-profit organizations are classified as private companies unless they can prove that they are public charities. Auditors' reports and actions are made more accurate, consistent, and verifiable when GAAS is followed. 

There are three main categories in GAAS: general standards, standards of fieldwork, and standards of reporting.