What are the types of audits for nonprofits?
Nonprofits buy six different things that get called an audit: a financial statement audit, a single audit, a program-specific audit, a review, a compilation, and agreed-upon procedures. Only federal spending forces the choice — at $1,000,000 of federal awards expended the single audit becomes mandatory (2 CFR 200.501).
Last verified: 2026-09-20 · Every figure links its source.
What are the types of audits for nonprofits?
| Engagement | What the CPA gives you | What triggers it | Rule |
|---|---|---|---|
| Financial statement audit | An opinion on the statements | State law, funder, lender or bylaws | AICPA standards |
| Single audit | That opinion plus compliance testing of major federal programs | $1,000,000 or more in federal awards expended | 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 and no financial statement audit required | 2 CFR 200.507 |
| Review | Limited assurance from inquiry and analytics | A funder or state accepts a review | AICPA standards |
| Compilation | Statements in proper form, no assurance | Internal or lender use | AICPA standards |
| Agreed-upon procedures | Findings on procedures you specify | Monitoring a below-threshold subrecipient, for example (2 CFR 200.425) | AICPA standards |
Source: 2 CFR 200.501 · 2 CFR 200.507 · 2 CFR 200.425 · Last verified: 2026-09-20
What is the difference between a financial review and an audit for a nonprofit?
An audit tests: the CPA obtains evidence, confirms balances with third parties, samples transactions, evaluates internal control and issues an opinion. A review does not test — it is inquiry of management plus analytical procedures, ending in limited assurance that the CPA is not aware of material modifications needed. A compilation is presentation only, with no assurance at all. States that set tiered thresholds usually accept a review in the band below their audit threshold; Illinois is a clear example on our requirements page.
Source: Illinois Attorney General, audit threshold · Last verified: 2026-09-20
When does a nonprofit need a single audit instead of a regular audit?
Not instead — in addition to. A single audit contains the financial statement audit and adds compliance work on the federal programs selected as major. The test is a dollar amount: federal awards expended during the fiscal year, measured when the activity occurs, not when the award is signed (2 CFR 200.502). What counts is covered in what counts toward the single audit threshold.
Source: 2 CFR 200.501 · 2 CFR 200.502 · 2 CFR 200.514 · Last verified: 2026-09-20
What is a program-specific audit?
When an organization expends federal awards under only one federal program and the program's statute, regulation or award terms do not require a financial statement audit, it may elect a program-specific audit instead of a single audit (2 CFR 200.501(c)). If the federal agency publishes a program-specific audit guide, the auditor follows it; if not, the auditee prepares statements for the program plus a schedule of expenditures, a summary schedule of prior findings and a corrective action plan (2 CFR 200.507). The submission deadline is the same.
Source: 2 CFR 200.501 · 2 CFR 200.507 · Last verified: 2026-09-20
What is an IRS examination of a nonprofit, and is it an audit?
It is a different process entirely. A financial statement audit is bought by the organization from an independent CPA. An IRS examination is opened by the IRS and looks at the exempt purpose, the return and the tax positions. The comparison is in IRS examination vs financial audit.
Source: IRS, About Form 990 · Last verified: 2026-09-20
Questions and answers
What types of audits are best for nonprofits?
The question is which one you are required to have. Above the federal threshold it is a single audit. Below it, state law, funders and lenders decide whether an audit, a review or a compilation is enough.
Is a single audit in addition to a regular audit?
Yes. A single audit includes the financial statement audit and adds compliance testing of major federal programs, all in one engagement and one reporting package.
Not sure which one applies? Check the single audit threshold.
This is public-record information, not accounting or legal advice.