Audit Preparation Checklist
The prompt
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Why this works
Separating audit preparation into financial records, compliance documentation, and grant-specific support reflects the three audit risk areas nonprofits face — financial statement accuracy, federal/state compliance, and grant compliance. Building the schedule of accounts that need reconciliation into the checklist prevents the most common audit delay: auditors waiting for reconciliations that weren't started until fieldwork began. Including a point of contact matrix ensures auditors can reach the right person for each documentation area.
Risks & review
Audit preparation quality significantly affects audit cost — well-prepared clients with organised documentation spend less in audit fees. Invest time before fieldwork in organising and labelling audit support files, and pre-answer common auditor questions in your PBC (prepared by client) schedules. If you have prior-year audit findings, prepare written evidence of remediation before fieldwork begins, as auditors will test remediation of prior findings on day one.