hey! i'm here to do your audit. no!don't worry! i'm cynthia cox, and this is the nonprofit minute. and i want to talk to you about what anaudit really involves, and why you don't have to stress out when the cpa comes and say, "i'm ready to do your audit."let's talk about what an audit really is because everybody uses the word, "ineed an audit" and they may not really need an audit. they may need a review, a compilation
or they just may need to talk to a cpa.an audit entails testing the account balances and thetransactions within the organization. it includes doing what we callanalytical review. so, we look at last year. we look at thisyear. we look at the changes between the years and we asked for a logical explanationfor those changes. and that determines what else we need tolook at in detail. it insures the accuracy of your cash, looking at your bank reconciliation,comparing it to your bank statement.
it looks at other accounts that you have, your accounts payable, yourdebt. and tests the accuracy of those balances. whereas a review is just looking and asking questions, it's not testing account balances. which is why anaudit is so much more comprehensive than a review or a compilation. the other really key factor with anaudit is it reviews your accounting procedures
and your internal controls. so, when i start asking questions and i go throughall of your procedures i have the opportunity to help you findbetter procedures, to find ways to have a bettersegregation of duties, to do things in a smoother way, to have the documentation that the irs might require, to have the documentation you as anorganization might need. those are very important and that is a tool that we have withinthe audit
that allows you to have value for youraudit not just a big price tag, because auditsare more expensive, but value. so you've decided you need anaudit. how do you shop for a cpa? well, i may be a little bit biased, but i thinkyou need to look for somebody that works in your industry. we work withnonprofit organizations. we do not work with profit organizationsbecause the two worlds are so different that we want to be really reallygood at what we do. so, look for someone who's in your type of industry.
if you're a nonprofit and you'relistening to this then certainly you want to look forsomeone who does extensive work with nonprofits, because they are so different from othercompanies. you don't have the same motive you'reserving. does somebody understand what you do?it's important that they understand what your mission is and how you need to fulfill that mission.an audit is expensive but it can add a lot of value. it can
give a third-party assurance that yourfinancial statements are accurate and that they portray what thereal financial status is of your organization. i'm cynthia cox with cox and associatescpa's, and we look forward to serving you.
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