A financial statement audit is a comprehensive way that your nonprofit can build its reputation for integrity, transparency, and professionalism. This audit involves a series of procedures performed by an independent Certified Public Accountant (CPA) to express an opinion on the fairness of the presentation of your entity’s financial statements. The desired outcome of an audit is an unmodified or “clean” opinion.

Key Audit Goals:

  1. Unmodified or “clean” audit opinion
  2. No proposed audit adjustments
  3. Audit draft within 60 days after fiscal year-end
  4. Audit completion within 90 days after fiscal year-end

A financial statement audit involves planning and risk assessment, substantive testing, and analytical procedures. These procedures allow an auditor to assess the risk of misstatements due to fraud or error and gather evidence about the accuracy, validity, and completeness of financial information. Preparing for your audit is a continuous process and can be broken down into 5 phases.

5 Audit Preparation Phases:

  1. Preparation: communicate information with your auditor throughout the year.
  2. Pre-audit conference: an opportunity to meet with the auditors and agree on expectations.
  3. Audit prep: gathering everything on the auditor’s audit item list in advance.
  4. Fieldwork: auditors observe and inspect controls, confirm account balances, and sample individual transactions.
  5. Review: management review of the draft audit report.

You can control the preparation process and contribute to the planning and audit phases through the sharing information and logistical support.

Ways To Prepare for An Audit:

  1. Be audit ready. Establish governance and reporting practices.
  2. Collaborate. Maintain communication with the auditor.
  3. Plan the logistics. Allocate resources for audit tasks, including staffing


Need to learn more about the process, manage your audit tasks, or plan for a smoother audit? YPTC  is here with checklists, processes, and experienced staff.  For more information, watch the webinar – Shifting Gears: Driving Toward a Better Audit Experience.