Having an audit can be a very stressful process. However, one of the things that you can do to make things better is to find a skilled and knowledgeable auditor who will turn out to be your ideal auditor. Because auditing is a very meticulous process, it is important for any organization to partner with the best auditors. A great audit team will be able to understand your nonprofit organization and offer useful recommendations and insight. It is crucial for auditors to understand the standards of nonprofit organization to ensure an accurate outcome. Someone who is not familiar with nonprofit can make the audit process turn into a nightmare. Here are a few things you need to do to make a sound decision.
The qualifications of the auditors should be the primary concern when selecting an accounting firm to audit your NPO. Many nonprofit organizations unknowingly sacrifice quality in order to get the audit done for a lower price. You might ask yourself a few questions: “Can I afford a bargain basement audit that is deficient?” and “How much will it cost me if a “cheap” audit misses an internal weakness that allows fraud to happen?” and finally “How will this damage my reputation?”. When it comes to auditing, the least expensive might not be the best choice. Indeed, inexpensive auditing services can cause your organization more harm than good. You risk the possibility of overlooking an internal weakness which may lead to fraud. This is why it is always important to get an auditor that understands NPO’s.
Follow these few steps to ensure your NPO gets the best audit:
RFP – When you have a list of several auditors that you think could perform your audit, you need to ask them to develop a request for proposal also known as RFP. The purpose of the RFP is to present an overview of the auditor or the audit firm as well as the process that they will follow in order to perform the audit. It should include their authorization to perform audits, their experience, a list of references, their availability and history with NPO’s. This should give you a good summary of the qualifications of your potential future auditors.
Peer Review – You also need to request the auditors’ most recent peer review report. These reviews are done by other accounting firms performing the same type of services in order to determine the quality of accounting and auditing work done by that firm. Every audit accounting firm that offers professional audit, reviews and compilation services must undergo regular peer reviews in order to maintain their license.
Experience in your industry – Get to know the kind of experience the auditor has in your industry. Have they worked with other NPOs? An experienced auditor will make the process faster and more efficient because they already understand your needs and what has to be done.
List of references – It is also very important for you to get a list of references from the auditors you are choosing. A good auditor must have a list of satisfied clients, so make sure you call a few of them just to be sure. You want to be able to ask questions to other NPOs for which they performed audits in the past. This way you will get the real facts regarding their performance in NPOs. At the end of the day, you want someone who is fully qualified to audit a nonprofit organization.
Meet – Most importantly, you should set up a meeting with the entire audit team. An audit firm must have the right team of professionals to conduct the independent audit. Ask them to share information regarding their level of experience, qualifications and workability among other areas.
Asking questions is always the best way to find the answers you are looking for. Do not be shy. Ask as many questions as possible about the auditors themselves or the work they have performed or will be performing for you. ABIP is here to answer your questions pertaining to auditing your NPO. Our knowledgeable professionals are among some of the best and will provide you with the services and the expertise your nonprofit organization need. Contact ABIP today and set up a consultation with one of our nonprofit accounting experts!