Non-profits often wonder if they need revision or review. This can be dictated by the requirements of the state, the need for Federal A-133, or funders specific requirements. The New York State has a particularly onerous requirements are very low when charitable organizations to conduct an audit. In recent years the NY State requires audits for organizations that make more than $ 250,000 a year. Each institution should be aware of state requirements and the requirements of funders – both current and future – when this decision
There are two major differences between the One, the cost of the audit is usually 1/2 the audit. And secondly, the review is just … review. CPA did not perform in-depth ‘test’ as they do in the review. They go for the material issues and obvious departures from GAAP. But they will not go and test unique individual transactions in the same way the review is completed. A review provides assurance, but not independently verify the business.
The moral of the story is to make sure you comply with government regulations on the basis of size and geography. And be proactive to understand the requirements of funders. (ie United Way requires review for organizations of a certain size, the audit for larger.) Be sure to read the fine print on the grant application so that you are aware of the requirements. Many companies may decide that the cost of the review outweigh the benefit of the grant. If the grant is for $ 10,000 and the audit will cost you $ 8,000, it’s probably not worth the effort.
Keep track of all these rules can be tricky, so make sure you have an active informed Finance Committee or partner that can help you through the issues.