Independent Financial Audit

Some independent financial audits are required by state or federal regulations. However, even when not required a nonprofit may choose to have an independent audit for a few important reasons:

• Independent audits are important for inspiring and maintaining donor trust because they demonstrate that the nonprofit is committed to financial transparency and accountability.
• Audited financial statements help the board of directors have more confidence in the organization's finances because they are based on an analysis by an objective third party.
• Some private foundations require that grant applicants and grantees submit audited financial statements, or similarly certified financial statements, in order to be eligible for funding.