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NONPROFIT YEAR-END FINANCIAL STATEMENT AUDIT (OR REVIEW) PROCESS IN A NUTSHELL (PART 5 OR 5)

THE YEAR-END FINANCIAL STATEMENT PROCESS:

A PRACTICAL GUIDE FOR SMALL NONPROFIT ORGANIZATIONS HAVING A CPA AUDIT (OR REVIEW)

(Part 5 of 5)

The Year-end process - Step by Step Walkthrough

Pre-engagement process

□   Organization identifies audit committee chair (ACC) or Independent Board Member (IBM)

□   Pre-engagement communication is sent to ACC or IBM

□   ACC or IBM confirms selection of the auditor

□   Preliminary information is requested from management (Including quickbooks file and board minutes)

□   CPA assesses scope of engagement and determines any non-attest service needed

□   Engagement letter with fee quote and deposit invoice sent to ACC or IBM

□   Signed engagement letter and deposit is returned to CPA

Planning                                                                    

□   Initial information request is sent to organization

□   Date that the organization will have information ready is determined

□   Organization sends initial information to CPA

□   Initial questions and follow-up are handled via phone or email

□   Onsite visit date set

□   Auditor identifies any additional information to have available for onsite visit

Audit Field Work

□   Auditor looks at financial and other records that the client was asked to have available.

□   Copies of some documents might be made

□   Auditor will document the steps to key processes (i.e., payroll , cash disbursements etc.)

□   Auditor will document internal control procedures

□   Auditor will discuss operations with management and may ask to speak to key personnel

□   Follow-up questions  and auditor updates management on the overall audit

Concluding the Audit

□   Auditor assembles workpapers and files

□   Auditor has follow-up communications with ACC or IBM

□   Additional documents may be requested, if needed

□   Auditor drafts financial statements and footnote disclosures

□   Draft reports are sent to client 's management for review

□   Changes that result from management's review are made

□   Revised drafts are sent to ACC or IBM

□   Changes that result from ACC or IBM are made

□   Revised drafts are sent to ACC or IBM for board approval

□   The representation letter is sent to ACC or IBM

□   The representation letter is signed and returned to Auditor

□   Audit findings and other communication letters are sent to ACC or IBM

□   Final copies of all documents are emailed to management in PDF format for organization’s files

□   Package is sent to client with copies to sign and mail (if not Efiled)

□   Final  invoice is included with the package