THE YEAR-END FINANCIAL STATEMENT PROCESS:
A PRACTICAL GUIDE FOR SMALL NONPROFIT ORGANIZATIONS HAVING A CPA AUDIT (OR REVIEW)
(Part 5 of 5)
The Year-End Process - Step by Step Walkthrough
Pre-engagement process
□ Organization identifies audit committee chair (ACC) or Independent Board Member (IBM)
□ Pre-engagement communication is sent to ACC or IBM
□ ACC or IBM confirms selection of the auditor
□ Preliminary information is requested from management (Including quickbooks file and board minutes)
□ CPA assesses scope of engagement and determines any non-attest service needed
□ Engagement letter with fee quote and deposit invoice sent to ACC or IBM
□ Signed engagement letter and deposit is returned to CPA
Planning
□ Initial information request is sent to organization
□ Date that the organization will have information ready is determined
□ Organization sends initial information to CPA
□ Initial questions and follow-up are handled via phone or email
□ Onsite visit date set
□ Auditor identifies any additional information to have available for onsite visit
Audit Field Work
□ Auditor looks at financial and other records that the client was asked to have available.
□ Copies of some documents might be made
□ Auditor will document the steps to key processes (i.e., payroll , cash disbursements etc.)
□ Auditor will document internal control procedures
□ Auditor will discuss operations with management and may ask to speak to key personnel
□ Follow-up questions and auditor updates management on the overall audit
Concluding the Audit
□ Auditor assembles workpapers and files
□ Auditor has follow-up communications with ACC or IBM
□ Additional documents may be requested, if needed
□ Auditor drafts financial statements and footnote disclosures
□ Draft reports are sent to client 's management for review
□ Changes that result from management's review are made
□ Revised drafts are sent to ACC or IBM
□ Changes that result from ACC or IBM are made
□ Revised drafts are sent to ACC or IBM for board approval
□ The representation letter is sent to ACC or IBM
□ The representation letter is signed and returned to Auditor
□ Audit findings and other communication letters are sent to ACC or IBM
□ Final copies of all documents are emailed to management in PDF format for organization’s files
□ Package is sent to client with copies to sign and mail (if not Efiled)
□ Final invoice is included with the package