Not-for-Profit Assurance Resources

COVID-19

Coronavirus (COVID-19) Audit and Accounting Resources
Visit this page for AICPA audit and accounting resources to help you navigate the new COVID-19-related challenges associated with providing high-quality financial reporting and high-quality audits, whether you are a financial statement preparer or in public practice.

Quick Reads

Quick reads are blogs or short-form articles that deliver actionable information in a "quick read." They are unlocked and available to the public.

Not-for-Profit Auditors: Are You Appropriately Skeptical?
Professional skepticism is an attitude that involves a questioning mind and a critical assessment of audit evidence. It is required for all audits performed under generally accepted auditing standards. This article discusses the threats to professional skepticism and what auditors can do to ensure a healthy level of it is maintained in their engagements.

Functional Expenses: A Revised Focus for Not-for-Profit Auditors and Preparers
For auditors and preparers, functional expense analysis under FASB ASU 2016-14 will necessitate at least some rethinking of the approach to the allocation and reporting of functional expenses.

Auditing Alternative Investments: 3 Things to Keep in Mind
Alternative investments in not-for-profit portfolios are becoming more sophisticated in both structure and underlying investment types. This article discusses some key considerations for auditing alternative investments. 

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Audit Planning

Importance of an Audit Debrief
A post-engagement debrief can help your audit team deliver quality service and promote efficiency and development. Like the annual planning meeting, the debrief is essential in preparing for the next year’s audit.

Managing Expectations for a Positive and Pain-free NFP Audit Process
The most effective auditor-client relationships are built on mutual respect and collaboration throughout the audit process. This article explains how communicating expectations and maintaining contact throughout the year helps to build that relationship and fosters a positive audit experience.

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Resources for Specific Audit Areas

Auditing Alternative Investments (PDF)
This resource provides considerations for auditing alternative investments. Valuation of alternative investments can be a challenge for many not-for-profits and their auditors. The more complex or illiquid the investment, the greater the risk of misstatement and the more persuasive audit evidence needs to be obtained by the auditor.

Governmental Audit Quality Center (GAQC) Resources
The GAQC offers comprehensive resources to help CPAs meet the challenges of performing quality audits in the unique and complex governmental auditing arena.

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Auditor Communications

Auditors are required to communicate certain matters to those charged with governance of the NFP. In cases where a communication is required, an auditor should refer to the AICPA Professional Standards and the related application and explanatory material included within the authoritative standards. The following documents are resources to assist with communicating essential information to your NFP audit clients.

• Checklist of Required Communications(Word) 
  Download this reference checklist to see a listing of required communications to management and those charged with governance. It includes references to the applicable auditing standards.
• Identifying, Evaluating and Communicating Deficiencies in Internal Control (PDF)
  This comprehensive practice aid provides examples of internal control deficiencies, risk factors that may indicate that deficiencies exist, and sample client communications for auditors of not-for-profits.
• Sample Engagement Letter (Word)
• Sample Internal Control Communications:
  Material Weaknesses Identified (Word) 
  No Material Weaknesses Identified (Word) 
  Matters Identified at an Interim Date (Word) 
  Other Matters - Significant or Material (Word) 
  Management Letter - Other Deficiencies (Word) 

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Audit Reports

ASB Enhances Communication in Auditors’ Reports
On May 8, 2019, the AICPA Auditing Standards Board issued standards that are designed to improve auditors’ ability to communicate in auditors’ reports and align generally accepted auditing standards with those of other standard-setting bodies. Note: SAS No. 141 defers the effective dates of SAS Nos. 134–140 to Dec. 15, 2021.

The following documents are resources to assist with audit reports.

Opinion Letter Templates

• Unmodified:
  Standard Letter (Word) 
  Change in Accounting Principle (Word) 
  Comparative Statements (Word) 
  Comparative Statements Including Statements of Functional Expenses (Word) 
  Summarized Prior Year (Word) 
  Emphasis of a Matter: Going Concern (Word) 
• Other:
  GAAP Departure with Comparative Statements (Word) 
  Unmodified Prior Year Qualified Current Year (Word) 
  Adverse - GAAP Departure (Word) 
• Disclaimer - Scope Limitation (Word) 

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Workpapers

NFPs have unique reporting requirements under GAAP. The following account workpapers are provided as examples of accounts that require special consideration.

• Read This First: Workpaper Template Overview
  • Promises to Give (Xls) 
  • Property and Equipment (Xls) 
  • Endowment (Xls) 
  • Investment Balances and Account Reconciliations (Xls) 
  • Investment Rollforward (Xls) 
  • Alternative Investments (Xls) 
  • Long-term Debt Rollforward (Xls) 
  • Analysis of Debt (Xls) 
  • Net Assets - Netting Contributions with Donor Restrictions Received and Satisfied in Same Year (Xls) 
  • Net Assets - No Netting of Time- or Purpose-Based Donor-Restricted Contributions (Xls) 
  • Net Assets - Additions and Releases of Donor Restrictions and Board Designations (Xls)
  • SOC 1 Checklist for Not-for-Profit Auditors (Xls)

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Risk Management for NFPs

The following resources were developed to assist auditors of NFPs with client education regarding risk management, design and implementation of internal controls.

• Opportunities for Fraud in Not-for-Profit Entities: Contributions vs Exchange Transactions (Article) 
• An Ounce of Prevention: Combating Fraud in Not-for-Profits (Article)
• Increasing Risk Awareness in Not-for-Profits (PDF)
• IT Controls for Not-for-Profit Entities (PDF)

Segregation of Duties Reference Charts for Small Not-for-Profits:

• Organizations with 4+ employees (PDF)
• Organizations with 3 employees (PDF)
• Organizations with 2 employees (PDF)

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Recommended CPE

Do you or your firm provide assurance services for not-for-profit clients? Get the targeted learning you need to perform highly effective audit engagements. The AICPA offers CPE-eligible courses developed by leading experts in coordination with the NFP Section's  technical staff. Section members receive an exclusive 20% discount on continuing education and other not-for-profit products offered by AICPA. Learn more about the exclusive discounts available for our member community.

The Section does not provide Yellow Book or Single Audit information or resources. The AICPA Government Audit Quality Center provides resources for those audit engagements.

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The AICPA's Accounting and Auditing Technical Hotline provides members with free, high-quality technical assistance by phone concerning issues related to accounting and financial reporting, auditing and attestation, compilation, and review standards.

The Section does not provide Yellow Book or Single Audit information or resources. The AICPA Government Audit Quality Center provides resources for those audit engagements.

See all Not-for-Profit recommended CPE.