Auditing NFP Organisation

NFPs have no external shareholders, dividends or profit maximisation objective either.

~Lack of segregation of duties (small staffing)

~Unqualified volunteers (poor knowledge of controls)

~Less formalised systems

~Donations without audit trail

~Difficulty in assessing going concern (unpredictability of donations)

Value for money audits (see earlier)

Concentrate on substantive procedures

(due to possible weak internal controls)

Analytical reviews and management representations

(where little audit trail)

Test larger % of population due to smaller volumes

If required by law = Normal audit report

If voluntary = Reflect objective of audit

In either case - follow the accepted structure:

1 Addressee

2 Scope

3 Responsibilities of auditors & managers

4 Work done

5 Opinion

6 Date, name and address of auditor