Your nonprofit’s audit committee has special responsibilities during an independent audit. This team is usually made up of board members and possibly others who are independent of the organization.
The committee typically selects the auditors and communicates with them during the initial discussion, reviews the engagement letter and negotiates fees. The committee will have separate discussions with the audit firm if there are specific concerns, such as suspected wrongdoing involving management or to ask the audit firm to focus on certain areas during the audit, such as an annual event or the handling of grant money.
The audit firm generally will contact the audit committee during the audit if areas of concern arise about management conduct. The firm will contact the committee at the end of the audit engagement, to report the results of its audit of the nonprofit’s financial statements, and to report any areas of significant deficiencies or “material weaknesses” in internal controls.