The right auditor is much more than a CPA. Auditors provide valuable guidance and ensure donors, members, and constituents trust that your organization is a good steward of their finances. These tips will help you find the right auditor for your needs who is both well-versed in nonprofits and a good cultural fit for your organization.
Find Potential CPA Firms
The first step is to find potential CPA firms who provide auditing services. You can look online for local firms or ask other nonprofits who they use and like. Your employees may also suggest companies or individuals with whom they have worked in the past.
It is vitally important to find an auditor who specializes in nonprofits. Nonprofit accounting has unique requirements and regulations, such as fund accounting and compliance with IRS Form 990. A CPA familiar with these aspects can ensure accurate financial reporting and adherence to relevant laws.
CPAs with nonprofit experience can also provide valuable insights and recommendations tailored to the organization’s unique financial situation. This can include guidance on improving internal controls, financial management, and strategic planning.
Lastly, because nonprofits are subject to various regulations and compliance requirements. A knowledgeable CPA can help navigate these complexities, reduce non-compliance risk, and identify potential issues before they become significant problems.
Develop Questions
To ensure that you have an apples-to-apples comparison of CPA firms after you’ve completed your research, develop a set of questions to ask each firm. This approach is similar to a request for proposal (RFP) process. Consider your organization’s needs. Some potential questions may include:
- Can you provide references? May I contact them?
- Who will I be working with?
- Do you work on site, or do you need remote access to materials?
- What is the typical audit process your firm uses?
- What can I expect during the audit?
- What do you provide me with afterwards? How long will it take?
- How much does it cost?
Depending on your needs, you may also have other questions to add to this list.
Consider a Formal Request for Proposal
A request for proposal (RFP) is a formal document issued to multiple possible vendors. It outlines your organization’s background, the project you have available, and the scope of work. It also includes a due date for the project and response requirements, such as references or case studies demonstrating experience with previous projects.
Responses are written following the outline given to vendors in the scope of work. The resulting documents help compare the relevant credentials of all potential CPA firms. Because the RFP requires all responses to be written in the same format, following identical guidelines, the results provide an apples-to-apples comparison among respondents, allowing you to sift through what makes one stand out above the others.
Gather all the responses, whether through a formal RFP process or a sit-down meeting with questions. Then, meet with your team and consider the answers. Your final selection should weigh all factors, including the firm’s relevant experience, assessing its approach, and comparing prices.
Consider Cultural Fit
Lastly, consider the cultural fit of the CPA with your organization. The best credentialed expert will not be effective if you feel intimidated or rushed when you work with them. Look for someone with whom you feel good rapport, a CPA who communicates clearly, who listens patiently, and who isn’t afraid to answer questions.
Welter Consulting
Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.
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