Meeting with the Independent Auditors

Questions to Ask
Evangelical Council for Financial Accountability
This article provided by the Engstrom Institute

In order to be prepared for a meeting with independent auditors, Evangelical Council for Financial Accountability suggests the following list of questions to ask? This is a helpful tool for nonprofits and a valuable resource for your financial management department.

1. What are our organization's areas of greatest financial risk?
2. As auditors, what steps have you taken or can you take to fully assess and limit your exposure to these higher-risk areas?
3. Does our organization's financial management staff have sufficient competency to handle their responsibilities?
4. Evaluate our organization's internal controls. Are they adequate?
5. Have you adequately addressed areas of potential conflict of interest (particularly regarding potential conflicts of interest of board members or key executives)?
6. How do you evaluate our compliance or noncompliance with the Intermediate Sanction regulations (which relate to excessive compensation, "insider" transactions, etc.)?
7. How do you evaluate the anti-fraud environment in our organization? What steps have you taken to assess our fraud risks?
8. Evaluate the adequacy of our documentation to support expenses, particularly with respect to staff-related expenses.
9. During the course of the audit, did you become aware of any taxable elements of executive compensation that were not included on Forms W-2?
10. What is your comfort level regarding our handling of donor-restricted gifts?
11. If our ministry uses the deputized fund-raising approach for career missionaries or other staff or raises funds for short-term missions trips, are adequate controls in place to ensure proper discretion and control are being exercised by the organization over the gifts related to these areas?
12. How do you evaluate the number and significance of adjustments that were proposed by the auditors? Were any adjustments proposed by the auditors that were withdrawn? If so, why?
13. Did the organization's staff adequately prepare work papers for the audit? Is there additional work that our staff could do which would reduce the audit fee?
14. Do you wish to expand your comments beyond what is reflected in the audit report or comment letter?

This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer or other professional.

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