---
title: How Not-for-Profits Can Prepare for an Audit
description: Being organized before an audit will help ease anxiety. Learn how not-for-profits can prepare for an audit and see how painless the process can be.
---

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# [How Not-for-Profits Can Prepare for an Audit](https://www.budgetease.biz/blog/how-not-for-profits-can-prepare-for-an-audit)

 Written by [Kathy Dise](https://www.budgetease.biz/blog/author/kathy-dise) | Oct 24, 2017 7:05:00 PM

Audits can be anxiety producing but they don’t need to be. You just need to be organized.

## Before or After Year-End:

- Expect a Risk Assessment, performed by the auditors to determine what they want to review. They provide a list of what they want to see in advance of the visit.
- Auditors to be in your office for a day.

## As Soon As Possible After Year-End:

- Finish your year-end close
- Enter necessary Journal Entries for insurance, payroll, depreciation, and other year-end adjustments.
- Review every account on the [balance sheet](https://www.budgetease.biz/blog/know-your-real-worth-the-balance-sheet-basics):
- Check all bills received after year-end. If bill relates to prior year, record a Journal Entry to include the expense in the prior year (only if on an accrual basis).
- Complete the [Quick Audit Checklist](https://www.budgetease.biz/hubfs/Quick_Audit_Check_List.pdf) to make sure you didn’t miss anything during your close. Make the necessary corrections and your QuickBooks will be clean.
- Ask for closing entries from the prior audit and enter them.
- Look over your filing system so you are confident that everything is easy to find. Each file should be complete. For example, if a check to pay a vendor is voided, document the replacement check information.
- Make sure supporting systems agree with your financial software. For example, separate invoicing or merchant service system must agree with QuickBooks.

## Two Weeks Before the Audit:

- Consider holding 8-16 hours on your calendar in the two weeks preceding the audit to compile information.
- Expect a lengthy Audit Request List from your auditor one to two weeks in advance of the field work that include bank confirmation letters you send to your banks.
- Determine with the Auditor the date when no more changes can me made for the year being audited.
- Start compiling information for the Auditors.

## How To Organize Information Before the Audit:

- Clearly note on each document you provide the number from the Audit Request List.
- Keep a list of everything that you hand them, they may ask for the same document twice.
- Provide only electronic or copies when possible. Information may not be returned.
- Don’t file Audit Request List documents away until the audit is completely done and financial statements are issued. Auditors may want to see an item again.

## Other Helpful Hints:

- Make sure you keep check stubs or get bank statements that include copies of the check.

Still worried about your audit? [Call us](https://www.budgetease.biz/new-schedule-a-call), we would be happy to take this worry off your hands by completing some or all of the above steps. We specialize in [nonprofit bookkeeping services](https://www.budgetease.biz/industries/nonprofit_bookkeeping_services).

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