An audit is a process for testing the accuracy and completeness of information presented in an organization's financial statements. Board members, staff, and their relatives cannot perform audits because their relationship with the organization compromises their independence. The audit report is addressed to the board of directors as the trustees of the organization. Health and social service organizations also have a statement of functional expenses.
Many audits show comparative information between fiscal years.
Notes to the financial statements, as required by GAAP, which might include information about functional expenses, a depreciation schedule, further information about contributions, volunteer services, and other significant information not obvious in the financial statements. In addition to the materials included in the audit report, the auditor often prepares what is called a management letter or report to the board of directors. This report cites areas in the organization's internal accounting control system which the auditor evaluates as weak. Does The auditor will request information from individuals and institutions to confirm bank balances, contribution amounts, conditions and restrictions, contractual obligations, and monies owed to and by your organization. The auditor will review physical assets, journals and ledgers, and board minutes to ensure that all activity with significant financial implications is adequately disclosed in the financial statements.