Tip #1- Oftentimes staff with not much experience conduct the audit, so, try to help them and show them the way, or they may get lost and the audit may take longer. The idea here is to have a helpful, not a defensive attitude. It can be frustrating to have to do this every year with different audit staff, but it’s part of the game. The good news is that it’s common for a prior staff in an audit to return the following year as a Sr. or Supervisor, so that you won’t have to train auditor again.
Tip #2- Be sure to have all the reports and items mentioned on the audit list, often given to the client- you a few weeks before the audit. If you don’t have all, call the CPA firm and let them know. Maybe you have other reports or items that can be alternatives to what’s on the list. Your audit may also be postponed until you have all the documents. Most accounting firms schedule nonprofit audits a few months during the months, so you may have some flexibility there.
Tip #3- Hire temp workers or volunteers on an as-needed basis to get all the documentation done, prepare worksheets, and help with filing, copying and other tasks. Some organizations use temps to help on the day-to-day activities while the staff are busy with the auditors. Your accounting staff may not be able to do their regular jobs and at the same time give auditors the attention and information they need. So, help at the right time can lessen the stress. Usually, having temps do a specific task, such as entering invoices for payment, work the best because the work is repetitive and training time is minimum. If you’re lucky to have an accountant in your board or as a volunteer, you can give him or her more involved financial tasks.
Tip #4- Communicate often with the manager responsible for the audit to identify issues or bottlenecks. Sometimes auditors use too technical language that the nonprofit staff may not understand and panic. Or maybe there’s a problem in finding information or explanations for certain transactions that you may be familiar with. The goal is to have a quick, clean audit with no major issues or conflicts. The quicker you know of problems, the smoother the process will be. Make a point to contact the manager at least once every few days.
Tip #5- Notify everyone in the organization of the upcoming audit, since auditors may need to talk to people in other areas of the nonprofit, such as programs and HR. Warn your own managers and staff that they may need to present certain things to the auditors, including showing them confidential HR and payroll files and reports. Since auditors usually request the same items and calculations, such as vacation accruals every year, the requests shouldn’t be that surprising. But it’s always good to let people know beforehand.
Other Considerations -Freaking out with questions asked by auditors make no sense— usually they follow a pre-set program that may not fit your organization 100%, so you can explain to them the situation in a respectful way and offer alternatives. Ask the auditors what goals they’re trying to get at. Maybe they are looking at mitigating a risk that doesn’t really apply to your nonprofit, so let them know about it. Thomson Reuters Audit guides, for instance, are very popular with many CPA firms that use their audit programs to guide them in this process. If you’re interested, you could buy this guide, and you may understand where many auditors are coming from. The guides may be expensive, but if you’re curious and want to learn more, you can go to the Thomson Reuters website and check out the PPC's Guide to Audits of Nonprofit Organizations.
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