Serving to Your Board Perceive the Nonprofit Audit Report

Congratulations on one other profitable monetary audit! Making it via with minimal complications is a testomony to planning, partnership together with your Program group, and powerful inside processes and procedures.

Now that every one the excellent entries have been cleared and reviews have been pulled, the final step of the nonprofit audit is to current your audited monetary statements and the shiny, clear opinion letter to the board.

These shows are sometimes mind-numbingly boring. You may have spent numerous hours organizing footnotes and grouping the road objects on the monetary statements to successfully inform your story. Your auditors march the board via the report, in the end saying that you simply had been cooperative, and the opinion is clear.

All in all, it’s anticlimactic for everybody. Throughout the 12 months, you’ll doubtless have your personal administration reviews that concentrate on programmatic and monetary outcomes. The presentation for the GAAP monetary assertion will get pranced out yearly like a birthday cake.

The auditors have a accountability to make sure that the board understands the GAAP monetary statements and the implications of the opinion letter. In case your board solely sees that format yearly, the time must be spent on the fundamentals of the assertion as a substitute of the main points of the audit outcome.

Assist your board really feel empowered to ask educated questions by giving them extra expertise with the GAAP statements all year long, and never simply through the audit presentation.

Sharing Your Nonprofit Audit Report Format Extra Than As soon as a 12 months

What when you used your accounting software program to punch out your GAAP monetary assertion and the important thing footnotes on a quarterly foundation? This manner you’re offering your board, government management, and lending establishments with a real GAAP monetary assertion. Any accounting software program value its salt can present the administration reviews and GAAP monetary assertion immediately from the software program—not via a labyrinth of Excel spreadsheets.

Presenting these reviews extra recurrently helps your board members and management really feel extra comfy with the data, as a substitute of attempting to recollect annually why it is perhaps totally different out of your common reviews.

3 Causes to Share GAAP Monetary Statements Quarterly

Higher Displays Your Group: This method offers a possibility so that you can be sure that your GAAP monetary assertion presentation mirrors what is definitely occurring in your present group.

Saves Time: Working the report quarterly avoids the large rewrite of assorted statements inside your GAAP reporting whereas finalizing the audit.

Supplies Extra Transparency: Presenting the reviews quarterly additionally offers your management with the power to talk with continuity through the 12 months in a constant method. Your Finance Committee members doubtless know your bankers and funders in the neighborhood. It serves you effectively to arm your advocates with GAAP outcomes and your administration reviews. You might be sharpening their pencils by giving them the data they should converse in your group’s behalf.

Empower Your Board with an Understanding of GAAP Reporting

Your mind-numbing annual audit report presentation now can develop into a dialogue! Your board members have had time to see the evolution of the GAAP monetary outcomes all year long. This offers a discussion board for the Board to speak in regards to the impression of those monetary outcomes and traits.

The auditors even have a possibility to talk to your program outcomes and inside controls. It is a win for everybody. The Board can really feel knowledgeable and comfy representing you to their constituents and program management can see how the audit reinforces the nice work that they do. On the finish of the day, you’re all right here for the mission that your Program group delivers!

To study extra about methods to set your group up for audit success, try our webinar with Paul Preziotti, CPA, Associate, Johnson Lambert, Audit Readiness: How one can Ace Preparation for Your Monetary Assertion Audit.

This publish was initially posted in June 2017 and up to date in June 2023.