The Different Types of Audit Services and What They Mean For Your Nonprofit

Are audit services on your mind as a nonprofit organization leader?

Do you run a non-profit and worry about your fiscal fitness? Are your productivity and scalability as efficient as it could be? If you’re concerned about these things for your organization, then you should consider an audit.

As a non-profit, you owe it to your donors to stay as lean and as efficient as possible. And in order to maintain your NPO status, you need to keep good record books. So enlisting outside audit services can be just what you need to be successful.

And don’t worry if the mention of an audit sent a shudder down your spine. We get it, nobody likes the idea of getting audited, but outside of the IRS, an audit can be a valuable tool to assess your current situation and look at the areas that can be improved.

If you’re concerned about how to fully utilize an audit, keep reading. We’ve got you covered on the different types of audit services as well as how they can benefit you and your organization.

Four Different Types of Audit Services

Nobody likes the idea of an audit. However, when it comes to maintaining the financial health of your nonprofit business, audits are necessary. An audit can take less time if you can keep your financial paperwork organized and thoroughly documented.

There are several different types of audits that are done by different people and will give you different outcomes based on your goals. Some audits are done internally while others are external and require an outside point of view.

When many people think of audits they think of accountants scrutinizing your finances. But operational audits are also just as valuable to your organization.

1. Operational

An operational audit will look objectively at the systems and functions of your business. The audit will assess your business’ systems and productivity as well as your available resources. They will then make their recommendations for how these areas can be improved and what additional resources will be necessary to make the changes needed.

Operational audits can look at your systems and processes as well as your various departments; these can include IT, HR, and staffing. Additionally, if you find your organization continually missing your goals and objectives, then an operational audit can shine a light on this. You can learn why these goals weren’t met and what can be changed to start meeting your goals and objectives in the future.

2. Financials

A financial audit will evaluate your current financial situation for your business or nonprofit organizations. After their complete assessment, they will give their recommendations for how you can improve the fiscal health of your charity.

They will look at your accounting records as well as your financial reporting of accounts receivable and payable. So, it is vital to keep good records so you can get an accurate assessment of your financial situation within your nonprofit.

If you want your nonprofit to help as many people as possible, you must be fiscally responsible year after year. If you find your organization continually behind with your accounting then the help of a CPA can benefit your company.

A professional bookkeeper will help you keep your records so that you never again dread another audit. Audits are helpful and beneficial tools for your company. And having good records can make them smooth and seamless which will allow you to learn from them rather than stressing out about getting them the right records for their audit.

3. Internal

An internal audit is usually done by and for the management of your company. This form of assessment gives light to how your company can make improvements and grow in the company years.

Regular internal audits are important to shine lights on possible areas of growth within your company. It doesn’t do your business any good to continue to do things as they’ve always been done when there is a better way of doing it.

In order to truly grow your company and help more people with your non-profit, you need to continually be open to new ways of doing things.

4. External

An external audit is done by a neutral third-party person or group looking at your business or nonprofit from an outside point of view. These audits are just as important as internal audits and will provide your company with a much-needed alternate viewpoint.

Additionally, by conducting an external audit you open your business up to learning about possibly blind spots that you hadn’t noticed before. This external point of view is vital to growing a healthy business so don’t shy away from it. It can be difficult to ask the opinion of someone outside of your organization, but it is imperative to healthy growth.

By bringing in an external CPA to look at your records regularly you can ensure that your charity will be able to help as many people as possible. While it can be difficult to bring in an outside group of people to dive into your finances, this is a vital step to providing valuable insight and reassurances that you’re operating a successful business.

Keeping good records in accounting software is vital to quick and easy audits. Additionally, having a bookkeeper can improve your audit experience. By having a professional help you keep good records in an organized manner can help you to have a better audit.

Bottom Line: Keep Your Business Financially Healthy

As you can see an audit doesn’t have to be scary. In fact, it can be a healthy process to learn where your non-profit can improve over time.

And enlisting the help of external audit services can be a great way to take an objective look at your non-profit. You’ve put your whole heart and soul into helping those who can’t help themselves. Don’t risk everything by not keeping your organization running efficiently and financially responsibly.

So, if you think that an audit would be a good experience for your non-profit, then find a CPA you can trust to come and take an objective look at your company today. With the help of an experienced professional, you can ensure that your non-profit will be around for years to come to help many more people.

So, if you’re looking for help on anything from filling out your Form 990 to updating your bookkeeping, then let’s chat. We offer affordable services and can help you set up your non-profit for success today.