If you own or operate a nonprofit company or church, your state may require you to have a certified audit of your institution. Certified audits are a way to protect public trust in many nonprofit organizations. The IRS doesn’t require certified audits, but they are mandated by Attorney Generals of many states. But even if you aren’t a nonprofit or a church, a certified audit gives you a snapshot of your organization’s financial health.
Some states require a certified audit for specific conditions, such as when your organization has received:
- Gross contributions over a threshold amount, typically in the range of $200,000
- An excessive amount of funds from a professional fundraiser
- Contributions from the sale of merchandise, services provided and cash donations
Your institution can incur penalties from these states if you do not comply with these rules. You must send the results of a certified audit if your state requires it. Penalties include losing your right to solicit funds in your state. Certified audits are generally kept on file at your state’s Attorney General’s office.
WHAT IS A CERTIFIED AUDIT?
A certified audit is a procedure for reviewing your organization’s state tax return, including the income and expenses. The experienced certified public accountants at Miller & Company with office locations in NYC and Queens provide their professional opinion on whether your financial statements match up with the financial position of your institution. Your financial statement includes the statement of activities, statement of financial position, cash flow statement, and any notes that pertain to those statements.
Accounting firms like Miller & Company are qualified to assess your company’s finances. They follow auditing standards to test and analyze your financial records and accounts. The best rated CPAs in NYC at Miller & Company perform your certified audit according to these strict standards.
If your organization has voluminous transactions, it may not be possible for a qualified accountant to test them all or to be completely knowledgeable of all your company’s activities. If this is the case, your CPA checks a random sampling of your transactions and then presents a statement attesting that they are reasonably assured that your financial statements are accurate. While no CPA could say definitively that your financial statements are perfect in this instance, it’s safe to say that your financial position seems to be fairly represented by your financial statements.
HOW TO DETERMINE IF YOU NEED AN AUDIT
Call Miller & Company at 718-767-0737 to find out if your organization needs a certified audit. A personal, top NYC CPA can answer your questions while asking several — all in service to help you make the correct decision. When you call, be ready to answer several questions, such as:
- Does your bank loan have a stipulation that requires an audit? It’s a common requirement of loans provided to churches and nonprofits.
- Does your organization or by-laws mandate an audit? If so, contact the top New York accountant Miller & Company for a timely and thorough certified audit.
- Do you anticipate a new fundraising or building campaign in the foreseeable future? If you are — and your project will be financed by a bank loan, it’s likely the bank will ask for audited financial records and statements. It often helps your ability to qualify for the loan if you provide them with a prepared audit. Otherwise, you may appear unprepared if you meet with a lender without one.
- What’s the size of your organization? When an institution grows to a certain size, it’s advisable to have outside professionals like Miller & Company conduct accounting or audit services. The rule of thumb is to hire a best CPA in NYC to conduct an audit if your organization has gross income of $1 million or more. If your organization brings in this much revenue, you’re now a viable entity in the business community, so you’re expected to conduct professional and ethical business practices. This typically includes having audits of financial statements.
- Does your institution receive private or government grants? Or are you preparing to apply for one? Most granting agencies only release funds after receiving your certified audit.
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Miller & Company LLP
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New York, NY 10017
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