From Nonprofit Auditor to Advisor: Insights on Audit Readiness
At NFP Partners, we pride ourselves on not just offering accounting services—but also on understanding the unique challenges nonprofit organizations face. To shed light on one of the most important aspects of nonprofit financial health, we sat down with one of our senior accountants, Carolina Turrin, who brings a valuable perspective – a background in auditing.
Here’s what she had to say about preparing for audits, avoiding common pitfalls, and what nonprofits should know about staying audit-ready year-round.
Avoiding Common Mistakes
When asked about the most frequent audit issue she encountered, the answer was simple but telling: lack of preparation. Many nonprofits wait until the last minute to start preparing. That’s when stress, errors, and delays tend to pile up. Carolina’s advice on how to avoid such is to start with organization.
“Use your most recent audit information request list as a guide and begin preparing those documents early. Having everything ready ahead of time can make a significant difference.”
What Should Always Be Audit-Ready?
Every account balance should be backed by clear documentation. This includes bank statements, payroll tax returns, contracts with donors, and more. Backing up every figure with supporting records isn’t just good practice—it’s essential.
When Should You Start Preparing?
There’s no ‘audit season’—audit readiness is a daily habit. Strong internal controls and quarterly reviews that meet audit standards are key. You can’t cram for an audit. If you do a little each day, it’ll go a long way.
At NFP Partners, we know how difficult that can be for nonprofits wearing multiple hats at any given time. Contact us today for some helpful resources!
A Message to Nonprofits: Auditors Aren’t the Enemy
“I wish every client knew that auditors aren’t out to get them. They aren’t magicians either—they rely on evidence. Their role is to verify the story your financials are telling.”
What Does Strong Internal Controls Look Like?
How can you tell if your nonprofit has strong internal controls? Carolina advises you to look for timely and accurate bookkeeping, clear segregation of duties, routine financial reviews, and transparent reporting. These practices reduce risk and signal your organization takes compliance seriously.
Even with a lean team, staying audit-ready is possible. Set a plan collect information monthly, and organize it with purpose. That discipline pays off when audit time comes.
Tools That Make a Difference
Technology plus process equals confidence! Your nonprofit should be using a combination of tools to stay on top of your finances, including:
- Accounting software
- Budgeting tools
- Financial reporting systems
- Written policies for approvals and roles
What’s on the Horizon?
Budget smarter: “Inflation or new tariffs may affect audit costs. Make room in your budget now.”
Watch for trends: “Artificial Intelligence is being increasingly used to flag anomalies—helping prevent fraud and errors before they escalate.”
Starting Your First Audit? Start With This Advice
“The first audit really starts with your first journal entry. From your chart of accounts to the way you store documentation—everything should be done with audit standards in mind. If your accounting is solid, the audit will reflect that.”
Audit readiness doesn’t have to be overwhelming. With consistent processes, the right tools, and the right mindset, your nonprofit can move through audits with clarity—and come out stronger on the other side.
Want to talk with one of our experts about getting audit-ready? Contact NFP Partners today to learn how we partner with your nonprofit to bring peace-of-mind accounting.