What Is a Nonprofit Audit?
A nonprofit audit is an independent CPA's examination of the organization's financial statements that ends in a written opinion on whether they are fairly presented. When the organization also spends federal awards above the threshold, the engagement expands into a single audit under 2 CFR part 200, subpart F.
Last verified: 2026-09-16 · Sources are linked on every fact below.
What is a nonprofit audit?
A nonprofit audit is an examination of the organization's financial statements by an independent CPA, ending in a written opinion on whether the statements are fairly presented. It is not an investigation of the staff and it is not a tax filing.
Source: 2 CFR part 200, subpart F · GAO Government Auditing Standards · Last verified: 2026-09-16
What types of audits do nonprofits get?
Nonprofits most often buy one of five things: a financial statement audit, a review, a compilation, a single audit, or a program-specific audit. An audit gives an opinion, a review gives limited assurance, and a compilation gives none. A single audit is required once federal awards expended reach the threshold, and a program-specific audit can replace it when federal money was spent under only one program.
Source: 2 CFR 200.501 · 2 CFR 200.507 · Last verified: 2026-09-16
| Engagement | What the CPA provides | Typical trigger | Rule |
|---|---|---|---|
| Financial statement audit | An opinion on the financial statements | Funder, lender, state registration or board policy | AICPA standards |
| Review | Limited assurance, based on inquiry and analytical procedures | A smaller organization whose funder accepts a review | AICPA standards |
| Compilation | Statements presented in proper form, with no assurance | Internal or lender use where no assurance is required | AICPA standards |
| Single audit | An opinion on the statements plus compliance testing of major federal programs | Federal awards expended at or above the threshold | 2 CFR 200.501 |
| Program-specific audit | An audit of one federal program instead of the whole entity | Federal money spent under only one program, where the program permits it | 2 CFR 200.507 |
Assurance levels for audits, reviews and compilations follow AICPA professional standards; the federal rows link the rule. Last verified: 2026-09-16
How do you prepare for a nonprofit audit?
Close the year, reconcile every bank and investment account, and pull the grant agreements, payroll allocations, board minutes, fixed asset and debt schedules, documentation of donor restrictions, and the status of every prior-year finding. If the organization spent federal awards, prepare the schedule of expenditures of federal awards first, because the single audit is built on it.
Source: 2 CFR 200.508 · 2 CFR 200.510 · Last verified: 2026-09-16
- Trial balance and the general ledger for the full fiscal year
- Bank and investment statements with reconciliations for every month
- The grant and contract agreements behind every federal, state and foundation award
- The schedule of expenditures of federal awards, if the organization spent federal money
- Payroll records, including the basis for allocating salaries across programs
- Board and committee minutes for the year, signed
- Fixed asset, debt and lease schedules
- Documentation of donor restrictions and of any release from restriction
- The prior year's findings and the status of each corrective action
- The current accounting policies and the list of people who approve payments
Source: 2 CFR 200.508 · 2 CFR 200.510 · 2 CFR 200.511 · Last verified: 2026-09-16
Does my nonprofit need an audit?
The federal test is a single number: federal awards expended in the fiscal year. Above the threshold a single audit is required; below it, whether you need an audit depends on state law, your funders, your lender and your own bylaws. The federal rule and the state picture are on nonprofit audit requirements.
Source: 2 CFR 200.501 · Last verified: 2026-09-16
How long does an audit take?
The work runs in three phases: planning, in which the auditor agrees the scope and requests documents; fieldwork, in which testing happens; and reporting, in which the draft statements and any findings are reviewed with management and the board. The calendar is driven by how quickly the year is closed and how complete the requested documents are. For a single audit the outer limit is the federal filing deadline: the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period.
Source: 2 CFR 200.512 · Last verified: 2026-09-16
How to choose an auditor
Compare peer review results, nonprofit and single audit experience, the people who will do the work, and the fee basis. The roles a nonprofit is buying are separated on nonprofit accounting services and CPA firms, and the firms observed on filed single audits are listed on audit firms by state.
Post an audit RFP
Writing the request is covered step by step on how to write a nonprofit audit RFP, with a sample you can copy. When it is public, post it at no cost so CPA firms that audit nonprofits see it.