What Boards Should Review Before the Audit Begins
- BryMar Crew
- 7 days ago
- 3 min read
Updated: 6 days ago
Financial audits are simply part of life for Nonprofit Organizations. Board members, donors, regulators, and other stakeholders all rely on audited financial statements as a signal of trust, transparency, and strong stewardship.
Yet even well-run nonprofits can find themselves feeling reactive when audit season arrives—scrambling for documents, fielding last-minute questions, or unsure whether the right groundwork was laid months earlier.
The good news? A smooth audit doesn’t start with the auditors—it starts with thoughtful, year-round board oversight. When boards understand what to review before the audit begins, they help shift the entire organization from reactive to prepared.
Let’s walk through what that looks like in practice.
Why Audit Preparation Starts Long Before the Audit
One of the most common misconceptions we hear is that audit preparation begins when the audit engagement letter is signed. In reality, the most effective audit prep happens throughout the year.
Here’s why early preparation pays off—for boards and management alike:
Lower audit costs When financial records, policies, and documentation are organized and readily available, auditors can focus on the audit itself rather than tracking down information. Fewer delays, clearer documentation, and smoother workflows help prevent unnecessary overruns and keep audit costs predictable.
Fewer surprises Incomplete records or unresolved errors increase the risk of audit adjustments or unfavorable findings. Proactive review helps ensure financial statements are accurate and reliable—exactly what boards and donors expect.
Reduced staff stress Audit season can be demanding. Spreading preparation across the year avoids last-minute scrambles and burnout, keeping your finance team focused and confident.
Board Oversight vs. Management Execution: Knowing the Difference
A key role of the board is oversight—not execution. Understanding where board responsibility ends and management responsibility begins is essential for effective governance, especially during audit season.
At a High Level:
Board Responsibilities
Appoint and oversee the independent auditor
Monitor the financial reporting and audit process
Oversee internal controls and risk management
Evaluate whether risks and controls remain appropriate as conditions change
Management Responsibilities
Prepare financial statements and schedules
Maintain internal controls and accounting systems
Provide audit documentation and responses
Develop accounting estimates and judgments
When boards focus on oversight—and ask the right questions—management is better positioned to execute efficiently.
Documents and Policies Auditors Commonly Request
Auditors typically provide an initial request list, but follow-up questions are part of the process. Boards don’t need to gather these materials themselves, but they should understand what’s expected and confirm management is prepared.
Common audit requests include:
Financial records
Balance sheet
Statement of activities
Statement of cash flows
Trial balance and general ledger
Transaction support
Bank statements and reconciliations
Payroll reports
Invoices, receipts, and disbursement support
Legal and governance documents
Lease, loan, and contract agreements
Bylaws and articles of incorporation
IRS Form 1023 (Application for Recognition of Exemption)
Policies and controls
Accounting policies and significant estimates
Internal control documentation
Risk assessments and mitigation strategies
Nonprofit organizations that standardize reporting and documentation throughout the year are far better positioned to respond accurately—and quickly—when audit requests arise.
Common Audit Red Flags Boards Often Overlook
Even experienced boards can unintentionally overlook issues that complicate audits. A few patterns show up again and again:
Static Risk Assessments Risk isn’t static—and audit planning shouldn’t be either. Risks can evolve due to staffing changes, new vendors, technology updates, or regulatory shifts. Boards that revisit risks only once a year may miss emerging vulnerabilities.
BryMar insight: A dynamic risk assessment approach allows controls to evolve alongside your foundation.
Quality Assessments Even in years when a full audit isn’t required, periodic quality assessments help strengthen controls, reduce fraud risk, and reinforce financial credibility. These reviews are less about compliance—and more about confidence.
Over-reliance on Peer Practices Benchmarking can be helpful, but copying another nonprofits policies’ can create gaps. What works well for one organization may not align with your size, structure, or mission. Use peer insights as inspiration—not instruction.
How Early Preparation Reduces Audit Fees and Delays
When audit preparation is embedded into normal operations, everything runs more smoothly.
Auditors spend less time tracking down documents. Management avoids last-minute fire drills. Boards receive clearer, more timely reporting. And audit timelines stay on track.
In short: preparedness protects both your budget and your people.
A Board-Level Takeaway
Audits don’t have to be a stressful annual event. With consistent oversight, proactive planning, and clear roles, boards can help create a calm, efficient audit experience—one that reinforces trust with donors and regulators alike.
Ready to Strengthen Your Audit Readiness?
At BryMar CPA, we partner with nonprofit organizations as trusted auditors and advisors. Beyond delivering a high-quality audit, we help boards and leadership teams identify opportunities to strengthen financial processes, enhance governance practices, and reduce risk over time. If you’re seeking an audit relationship that adds insight—not just assurance—we’d welcome the opportunity to work with you.
👇 Download Our Board Audit Readiness Checklist
