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The Camp Audit

The Camp Audit . “Keep your friends close and your auditor closer”. Topics for Discussion. Determining the need for an audit Other levels of reporting by CPA’s Hiring the auditor The RFP process – interview and selection Audit Process – before, during and after Issues that may arise

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The Camp Audit

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  1. The Camp Audit “Keep your friends close and your auditor closer”

  2. Topics for Discussion • Determining the need for an audit • Other levels of reporting by CPA’s • Hiring the auditor • The RFP process – interview and selection • Audit Process – before, during and after • Issues that may arise • Other requirements

  3. Determining the Need for an Audit • Audit - express an opinion on financial statements based on sufficient and appropriate audit evidence • Usually required by a third party • Government agency, funding source, banking relationship, internal board oversight • Some situations may not require an audit

  4. Other Levels of Reporting by CPA’s • Review reports - A review is substantially less in scope than an audit and does not express an opinion. • Compilation reports - do not express an opinion or provide any assurance. • Tax filing preparation • Consulting reports

  5. Hiring the Auditor • Typically done via a Request for Proposal (RFP) • RFP solicits responses from several possible audit firms • Responses are reviewed by management and Board of Directors • Final interviews are conducted • Selection is typically made by the Board

  6. The RFP Process • Request summary of industry experience with other similar organizations • Outline end product requested: audited financials, Form 990, meetings with Board and Committees, any specific third party (government) requirements • Request references • List of engagement staff and their credentials and training

  7. The RFP Process • Request confirmation of licensing in the state you are located • Request a copy of the audit firm’s most recent Peer Review Report • Outline time line and due date for all commitments • Outline fee arrangements and consider multi-year commitments

  8. Interview and selection • Discuss the firm’s relevant experience • Discuss the firm’s philosophy for communication with management and the Board • Involve members of the Board and management in the selection process • Make sure you have enough lead time before your year end because a change in auditors requires time and effort for all parties involved

  9. Planning the Audit • Meet with the firm selected to plan out a timeline and select fieldwork and meeting dates • Read and sign an engagement letter (contract) • Have the auditor provide a list of documents for the Camp accounting staff to have prepared in advance • Make sure the preparation gets done in advance

  10. During the Audit • Make sure Camp staff have time available to meet the auditors needs while they are on site • Be ready to respond to additional requests during audit field work • Suggest an exit conference with the audit team to review and update timeline and “to do” list

  11. Wrap Up and Conclusion • Be sure to review and discuss drafts of the financial statements that the auditors will provide – see sample • Schedule meeting dates with the Committees and the Board to provide time for questions and possible changes to reports • The Board will approve the financial statements once agreed to and presented by the auditors

  12. Issues That May Arise • Audit adjustments to the financial statements • Preliminary results may not match final results • “Going concern” issues – if the Camp has a difficult financial situation

  13. Other requirements • Any specific third party reports – may be government reports • Preparation and review of tax form 990 – typically also prepared by audit firm • Board review and approval required • A few words on Form 990 T

  14. Standard Audit Report INDEPENDENT AUDITORS’ REPORT To the Board of Directors of ABC Organization Report on the Financial Statements We have audited the accompanying financial statements of ABC Organization (a nonprofit organization), which comprise the statement of financial position as of June 30, 20X1, and the related statements of activities, functional expenses, and cash flows for the year then ended and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

  15. Standard Audit Report Continued Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Organization as of June 30, 20X1, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the Organization’s 20X0 financial statements, and our report dated October 2, 20X1, expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 20X0, is consistent, in all material respects, with the audited financial statements from which it has been derived. City, State Report Date

  16. Statement of Financial Position

  17. Statement of Activities

  18. Thank You! Howard Cheney, CPA hcheney@mbkcpa.com (413) 322-3491 Melyssa Brown, CPA mbrown@mbkcpa.com (413) 322-3484

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