Nonprofit audits are crucial for keeping your organization transparent and protecting your tax-exempt status. Our team has over 20 years of experience in non-profit and single audit engagements.
Running a not-for-profit requires navigating complex financial and regulatory landscapes, with transparency as a top priority. A 501(c)(3) audit ensures compliance with IRS regulations, maintains donor trust, and upholds financial integrity. More than just a requirement, a well-conducted audit safeguards your mission, confirming that every dollar is used efficiently and appropriately.
Our team specializes in serving not-for-profits and follows the highest standards set by the American Institute of Certified Public Accountants (AICPA). We understand the unique challenges of maintaining tax-exempt status, managing restricted funds, and meeting grant compliance. With decades of experience in the sector, Linked Accounting provides thorough audits tailored to your organization’s needs.
For not-for-profits, financial health and compliance are critical. A thorough audit conducted by a CPA offers several key benefits:
A not-for-profit audit is a detailed, independent review of your financial records, conducted in accordance with Generally Accepted Auditing Standards (GAAS) as set by the AICPA. The audit process typically includes:
Audits provide more than just compliance—they offer opportunities to improve your organization’s financial health:
As non-profit auditor, we provide thorough, consistent audits ensuring compliance with IRS regulations and strengthening financial practices. Our team’s commitment to zero turnover ensures you’ll work with the same dedicated experts year after year, allowing us to build a deep understanding of your organization.
With offices in Utah, Montana, and Hawaii, we serve clients nationwide. We help not-for-profits of all sizes meet donor and grantor expectations while safeguarding financial health.
Contact us for tailored non-profit accounting solutions.
A non-profit audit consists of a thorough, independent examination of the organization's financial statements by a Certified Public Accountant (CPA). It includes reviewing the accuracy of financial records, evaluating internal controls, verifying compliance with accounting standards, and assessing whether the organization is following IRS regulations. The audit typically results in a report that confirms whether the financial statements are free of material misstatements and are in accordance with Generally Accepted Accounting Principles (GAAP).
Form 990 is an annual tax return that non-profits file with the IRS, providing information about their financial activities, governance, and compliance. It is self-reported by the organization. An audit, on the other hand, is an independent examination of a non-profit’s financial records by a CPA to verify accuracy and ensure compliance with accounting standards. While a 990 is required by the IRS, an audit is often required by donors or grantors.
Yes, the IRS can audit small nonprofits. All tax-exempt organizations, regardless of size, are subject to audits. The IRS may audit a nonprofit for reasons such as inconsistent or incomplete filings, failure to file required forms (like Form 990), excessive executive compensation, unreported unrelated business income, or tips/complaints regarding misuse of funds. While audits are less common for small nonprofits, compliance with IRS regulations is still required, and maintaining proper financial records is essential.
The IRS can generally audit a 501(c)(3) nonprofit for up to three years from the date a tax return (Form 990) was filed. However, if the IRS identifies substantial errors or evidence of fraud, they can audit up to six years back. In cases of willful tax fraud or failure to file required returns, there is no statute of limitations, and the IRS can audit at any time.
The nonprofit organization undergoing the audit is responsible for the cost. This includes paying for the services of an independent Certified Public Accountant (CPA) or auditing firm to conduct the audit. The cost may vary depending on the size and complexity of the organization. Many nonprofits budget for audits as part of their financial planning, especially if required by donors, grantors, or regulatory agencies.
Small charities are not typically required to undergo audits unless mandated by state law, specific donors, or grantors. However, even when not required, some small charities choose to have an audit for transparency and to build trust with donors. It’s important to check state regulations and any specific funding requirements to determine if an audit is necessary for your organization.
A nonprofit audit is a thorough, independent examination of an organization’s financial statements, performed by a Certified Public Accountant (CPA). It provides the highest level of assurance, verifying the accuracy of financial reports and compliance with accounting standards.
A review, on the other hand, is less comprehensive. It involves limited analysis of the financial statements, where the CPA performs basic checks and inquiries but does not perform the in-depth testing found in an audit. A review provides moderate assurance but does not confirm accuracy at the same level as an audit.
Nonprofits are typically audited annually, especially if required by state law, donors, or grantors. Even if not mandated, many larger organizations choose to undergo an annual audit to ensure financial transparency and maintain donor confidence. Smaller nonprofits may not require yearly audits, but regular reviews or audits every few years can help maintain strong financial practices.
There is no specific donation amount that automatically triggers an IRS audit. However, if your charitable contributions are unusually large compared to your income, or if they exceed 60% of your adjusted gross income (AGI), it may attract IRS attention. To ensure compliance, always keep proper documentation of your donations, such as receipts or acknowledgment letters from the charity, and report them accurately on your tax return.
Nonprofit audits are not automatically public record. However, many nonprofits voluntarily make their audits available to the public, especially if required by donors, grantors, or certain state regulations. While the audit itself may not be public, financial information reported on IRS Form 990 is publicly accessible, and some nonprofits include their audit report with the 990 filing.
Laura Weston, CPA, brings over 20 years of audit and business advisory experience, including roles as a controller for both a manufacturing and a real estate investment company. She specializes in serving clients across various industries, including real estate, manufacturing, franchising, ERISA, and not-for-profit organizations. Laura also provides litigation support, helps strengthen internal control policies and procedures, and conducts due diligence for acquisitions and sales. Laura holds a Master’s degree in Business Administration from Utah State University and is a member of the American Institute of Certified Public Accountants. She is licensed as a CPA in both Utah and Hawaii. Outside of work, Laura enjoys traveling and spending time outdoors with her husband and two children.
With extensive experience in this sector, we ensure that your financial statements meet compliance standards while maintaining the highest level of transparency. Our approach addresses common nonprofit-specific challenges like grant compliance, restricted fund management, and operational efficiencies, helping you demonstrate accountability to your donors and stakeholders.
We understand the nuances of nonprofit accounting, offering in-depth audit services that ensure your organization is not only compliant but also positioned to thrive.