Once again everyone’s favorite time of year has arrived, audit time! For many, this can be viewed as a daunting and even arduous process. A family foundation in NCFP’s network of Friends who no longer cringes at audit time shares this list of questions to ask your auditor to ensure your organization has a clean financial bill of health.
Questions for the Auditors
- Did management limit or restrict the audit in any way?
- Did the scope of the audit differ from pre-audit plans?
- Are there any serious weaknesses that were discovered during the audit that require corrections?
- Did you come across any evidence that management may have exceeded its authority in matters prescribed by the board of directors, or that it has failed to comply with any directives by the board?
- Were there any unusual transactions completed during the year that are not evident by the financial statements?
- Did accounting practices change significantly this year?
- Are there any developments to which the board in your opinion should be particularly alert?
- Are there any off balance sheet items that are not disclosed?
- Has management correctly followed all procedures and guidelines in all grants and gifts to your organization this year and in past years?
- Did you receive management’s cooperation during this audit?
- Is the format of the unaudited financial reports to the board adequate for a nonprofit of your size?
- Did you satisfactorily resolve disagreements with management (if there were any) on accounting principles and methods?
Hopefully these 12 questions will help guide you, your auditor and your board through a productive discussion about your 2012 organizational finances. Even if the audit process may be groan-worthy, just think about the impact you are making on your grantees and community through your tax-exempt status. As a bonus, if you want to make your grantee’s process a little easier, pass this list on to your grantees it work for them too!