Is it an Audit or a Financial Review?
The intention is the same, as it is the same process. The difference is in who does it! If a paid tax professional does it, it will probably be called an audit. If unpaid volunteers do it, it will probably be called a financial review. We use the terms interchangeably.
We can’t think of a volunteer group that would not benefit from having an audit at the end of each financial year.
For some groups affiliated with national organizations, an audit is a requirement of their affiliation. For example, PTA’s are required to conduct an audit at the end of each financial year or whenever there is a change in Treasurers. If you belong to such an organization, audit guidelines will be provided for you. Follow them.
But, even if your group has no such legal requirement, an annual audit or financial review is simply a best practice and one that you may as well embrace.
Reasons NOT to do an Audit:
- You did something that you don’t want anyone else on the Board to find out about.
Reasons TO DO an Audit:
- Credibility – The Board and membership will be reassured that the financial affairs of the organization are being accurately represented by the financial reports.
- Oversight – The Treasurer will have the confirmation that his/her work was looked at and double-checked for accuracy.