Types of Audits
If your company or organization receives state or federal funds either directly or indirectly, you may be required to have an annual audit. There are three primary types of audits that may be required for non-profit organizations.
Our firm has extensive experience in conducting each of the audits listed.
1. Financial Statement Audit
The financial statement audit is a process that involves auditing the account transactions and year-end balances included in the organization’s financial statements and reporting on the “fairness of the presentation.” In Massachusetts, if your non-profit organization has revenue in excess of $500,000 for a given fiscal year, it must file an audited financial statement for that year along with the public charities form.
2. Yellow Book Audit – Government Audit
This is a specific type of audit that is conducted under Government Auditing Standards. This audit is triggered when your organization receives state funding. MA also requires the annual filing of the Massachusetts Uniform Financial Report.
3. Single Audit
This type of audit is required when a federal award has been received by the organization and is triggered when your organization spends $750,000 or more of those funds awarded during an organization’s fiscal year.
In addition to audits, the following services are also provided;
Financial Statement Compilation
A compilation engagement is when the accountants prepare financial statements from information provided by your management and the accountants assume minimal responsibility for the information contained therein. A compilation report is the lowest level of service offered by a CPA firm, and generally is most useful when there is a limited in-house capability for preparing financial statements and an absence of statutory requirements.
Financial Statement Review
This level of engagement is where financial statements are reviewed by a CPA and is the most practical and useful approach, unless audited financials are required. In Massachusetts, if your non-profit organization has revenues of less than $500,000, but more than $200,000, you may submit reviewed financial statements to the Massachusetts Attorney General.
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Smith, Sullivan & Brown, PC
80 Flanders Road, Suite 200
Westborough, MA 01581
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Massachusetts Society of Certified Public Accountants
Corridor 9/495 Regional Chamber of Commerce
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