Glossary / Audit
What is Audit?
An independent examination of a nonprofit's financial statements and internal controls.
Simple definition
An independent examination of a nonprofit's financial statements and internal controls. Required by many states for nonprofits above certain revenue thresholds. Can be a full audit, review, or compilation depending on requirements.
Why it matters for your nonprofit
Boards, grantors, and some states require an independent look at the books once revenue crosses a threshold. An audit is not a bookkeeping cleanup.
How it shows up in daily work
Close the year, freeze the books, give the auditor fund-level statements, and track PBC requests in one folder.
Common mistakes
- Hiring the same person who does monthly bookkeeping to ‘audit’ the year.
- Waiting until the auditor arrives to reconcile restricted funds.
- Treating a compilation or review as if it were an audit in grant reports.
How AlignMint helps
AlignMint ties fund accounting, donor records, and reporting in one place so terms like Audit show up correctly in your books—not only in a policy memo.
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