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Industries/Nonprofit

Audit file prep for nonprofit organizations.

Nonprofit files carry restrictions, grants and allocations that for-profit files do not. The standard pack ties the books to the draft statements; your reviewer takes the ASC 958 judgments.

What every file gets

The pack is the same on every file, in every industry. It is built from the client’s QuickBooks books and the documents your firm sends.

Lead schedules
Every trial balance account classified to a US GAAP line, in Excel and PDF, with prior-year final, per-books, adjustment and final columns.
Tie-out of the draft
The client’s draft statements re-added and every line agreed to the trial balance. Differences are findings about the draft, never silent changes to the books.
Fixed-rule ledger checks
Revenue cutoff, duplicate payments, journal entry testing, split purchases, opening balances, flux analysis, bank reconciliation and more. Each finding names its rule.
Proposed entries
A finding cites the evidence line and the standard, and proposes an adjusting entry. Nothing is posted to the books.
Review trail
A reviewer decides each finding and records a reason. Initials and dates travel with the working papers.
Inputs received and missing
The file shows what arrived and what did not, tied to the findings that need it.

Where the judgment sits on a nonprofit file

These areas decide the file. Industry-specific schedules are not part of the standard pack. Whether CORAA drafts any of them for a given file is agreed on the intake call before anything is uploaded, and what is not agreed stays with your team.

Areas your team will spend its time on

  • Net assets rollforward
  • Contributions and grants
  • Functional expense allocation
  • Investments and endowment

Typical PBC items from the client

PBC items from the client

  • Donor and grant agreements with restriction terms
  • Pledge receivable listing and collection history
  • Board-approved budget and board minutes
  • Functional allocation method and supporting time or space data
  • Investment and endowment statements
  • Federal and state award listings, if any

Where nonprofit files go wrong

Restrictions released twice or not at all
Spending that satisfies a restriction must move net assets.
Conditional versus unconditional
A grant with a barrier and a right of return is not revenue until the barrier is met.
Allocations that never change
A functional split unchanged for years while the programs changed.

What stays with your firm on nonprofit files

Fulfilled by CORAA means CORAA AI drafts the file and CORAA Network reviewers clear every flag, with a line-by-line review log. Your manager and partner then review it as they would any staff-prepared file. Your firm keeps the client, the engagement letter, the professional judgment and the signature.

CORAA never signs, issues or reports on anything, and never contacts your client unless you ask us to. Your first audit is free, so you can judge the pack on a real file. After that the fee is flat, set by entity size, and messy books are included.

Free resources for this work

Guides, templates and calculators on this site that cover the same ground. All free to use.

GuideNonprofit Audit Requirements: When a Nonprofit Needs an Audit and When a Single Audit AppliesGuideContributions and Grants for Nonprofits: Conditional vs Unconditional Under ASC 958-605GuideNonprofit Functional Expense Allocation Under ASC 958-720 and ASU 2016-14: Methods and Audit TestingGuideNonprofit Endowment and Donor Restrictions Audit Guide: UPMIFA, Underwater Funds and Net Asset ClassesGuideNonprofit Financial Statements Under ASC 958: Net Assets, Functional Expenses and LiquidityTemplateAudit Program: Nonprofit OrganizationTemplateNonprofit Audit Planning Memo (ASC 958 and Single Audit)TemplateNonprofit Financial Statements Template (ASC 958)ToolSingle Audit Threshold Calculator: $750,000 or $1,000,000 and Due Date

Questions firms ask

CORAA drafts the financial statement working papers from the books. The single audit work, such as the SEFA, major programs and compliance testing, stays with your team, and your firm signs the reports.
CORAA drafts the working papers and a tie-out of the client’s draft statements. Preparing a client’s statements can be a nonattest service for your firm, so check your independence position first. The independence guide on this site explains the issue.
They are nonprofits, so the same pack applies. There are audit program templates on this site for church and independent school engagements.
The donor agreements decide, and your reviewer reads them. CORAA does not decide restrictions.
Your first audit is free. After that, a flat fee per audit, set by entity size. Messy books are included, never a surcharge.

Sources: FASB ASU 2016-14, Not-for-Profit Entities (Topic 958)

More in industries
IndustriesGovernmental entitiesFederal award files under the Uniform Guidance: the threshold rule, the pack and the PBC list.IndustriesHealthcare practicesPatient revenue, contractual adjustments and receivables: the pack, the PBC list and the judgment areas.IndustriesEmployee benefit plansParticipant data, contributions and Form 5500: the pack, the PBC list and the judgment areas.
For US CPA firms

Join the CORAA waitlist

CORAA AI drafts audit working papers from your client’s QuickBooks books and does the first pass: lead schedules, tie-out, memos, draft notes and letters. CORAA Network reviewers clear every finding. Your firm reviews and signs.

  • First audit free, so you can judge the quality on a real file
  • Flat fee by entity size; messy books included
  • We work only with CPA firms, never their clients
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