Tyler places great emphasis on meticulous attention to detail in financial record-keeping, implementing efficient systems to ensure transparency and streamline operations. There are a few situations where your nonprofit organization may be required to conduct an audit. For example, your state might impose audit requirements if your income and spending exceed a certain threshold.
Clearly, the subject of payroll taxes involves plenty of moving parts and covers a wide range of accounting knowledge. A U.S.-based international CPA can draw on expertise in all of these areas when advising you on your https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ unique business setup. And while we discussed state income tax in a previous article, you should also remember local income taxes. These are sometimes assessed in large urban areas (think New York City, San Francisco, etc.). These can cover programs like short- and long-term disability, workers’ compensation, paid medical or family leave and more. Note that depending on the type of business you run, you might file an alternate form.
And while it’s certainly true that audits do offer a higher level of scrutiny, it’s not always necessary for organizations to obtain one. This is a perfect example of the deficiency inherent in off-the-shelf accounting software in their inability to generate financial statements for your audit. If your auditor creates financial statements for your audit, then they will report a deficiency in operation on your audit report.
Donors, grantors and other stakeholders view audits for evaluating an organization’s financial health. Nonprofits must provide a minimum of five years’ worth of documentation for the auditor to review. The audit examines the organization’s financial statements, including income and expenses (such as salaries). However, many foundations, government grants, and large donors may require audited financials as a part of their giving consideration process. By following this checklist, you’ll be well-prepared for your nonprofit audit, reducing the likelihood of surprises and ensuring a smoother audit process.
Our nonprofit CPAs and nonprofit auditors will assist you in evaluating these criteria and begin the audit process, if necessary. The following best practices can help reduce the amount of time and attention you need to focus on your next audit to reduce the internal strain on resources that can occur. Ensuring that these policies are clearly documented and consistently enforced is vital for maintaining organizational integrity. Kelly has expertise in audit, review, and compilation services across diverse industries, including nonprofit organizations, construction, manufacturing, and technology. Kelly possesses an extensive background in auditing nonprofit organizations, particularly those receiving federal funding. If there’s one thing I’ve learned, it’s that having the right tools makes all the difference.
Our years of experience working exclusively with nonprofits like yours will help you approach audits with confidence and make the most of them. Your organization’s Form 990 filing deadline is the 15th day of the fifth month after your fiscal year ends (May 15 if your fiscal year follows the calendar year like most nonprofits). If you won’t have enough time to complete your audit, start incorporating the recommendations, and fill out the form by the deadline, you can file for an extension of up to six months via IRS Form 8868. There are many misconceptions about audits, and the process can be challenging to understand at first. To clear up this confusion, let’s begin by answering some common questions about nonprofit audits.
