Does my Northern Virginia Nonprofit Need an Audit?

nonprofit financial audit northern virginiaWhether or not you think your northern Virginia nonprofit is required to undergo an audit, contracting the services of a northern Virginia non-profit auditor is an important task for every nonprofit to take.

What is an Audit and What Will it Tell Me?

An audit report provides your organization with information about whether its financial statements accurately represent its financial position.  The report on your non-profit audit in Vienna, Fairfax, Tysons Corner, Arlington or elsewhere will expressly state whether your nonprofit organization accords with the Generally Accepted Accounting Principles (GAAP), which are established by the Financial Accounting Standards Board (FASB). The GAAP establishes the proper practices for financial disclosures.

Nonprofit auditors in Northern Virginia typically issue one of four opinions about the financial status of your organization:

  1. Unqualified Opinion – which states that your nonprofit properly and accurately depicts its financial position.
  2. Qualified Opinion – which signals that the auditors found one or two instances where the nonprofit is not following GAAP, or that while your northern Virginia nonprofit does not properly or consistently follow the GAAP, it also does not misrepresent its financial position(s);
  3. Adverse Opinion – which explains where your nonprofit clearly misrepresented its financial position, or severely did not accord with the GAAP.
  4. Disclaimer of Opinion  – A disclaimer of opinion report is an abdication by your northern Virginia nonprofit accountant, stating that they felt prevent or obstructed in some way from properly auditing your nonprofit organization, and thereby refuse to issue an opinion.

Does the Federal Law Require That My Nonprofit Organization gets Audited?

The Internal Revenue Service (IRS) requires that any nonprofit organization that receives federal funding exceeding $500,000 must undergo an audit. Furthermore starting in 2015, if your nonprofit receives more than $750,000 in Federal Government funding, or receives stipulated funds from a specific department of the federal government, your northern Virginia nonprofit may be required to undergo a “single audit,” which is a more detailed audit report. If you believe that your northern Virginia nonprofit is required by the federal government to undergo an audit, contact an experienced northern Virginia nonprofit auditor today, or contact a skilled northern Virginia nonprofit accountant who can answer your questions about undergoing an audit in northern Virginia.

Does Virginia Require That My Nonprofit Organization gets Audited?

Nonprofit Audit law in Northern Virginia is nuanced. If your northern Virginia nonprofit receives more than $1,000,000 in annual revenue, your nonprofit organization is required by law to submit an audit prepared by an independent auditor. Relatedly, if your nonprofit organization claims between $750,000-$1,000,000 in revenue, your nonprofit organization may submit a financial review prepared by an independent nonprofit auditor.

Audit requirements can differ from state to state, depending on the state’s tax code. If you are unsure of whether your nonprofit organization is required by the IRS or by the State of Virginia to undergo an audit, contact a knowledgeable northern Virginia nonprofit accountant today. An experienced northern Virginia nonprofit auditor can help you clarify your financial position, and avoid future compliance issues.