Tab 9: Annual Audit (or Independent Financial Review)
The community foundation submits a copy of the annual audit as conducted by an independent certified public accountant. If total assets are $5 million or less, the foundation may submit a financial review conducted by an independent certified public accountant. Evidence of the public availability of the most recent audit or financial review is also submitted.
For more information, review Core materials, FAQs and a glossary of important terms
Related Standards
IV. Stewardship and Accountability
IV.A A community foundation is a steward of charitable funds, investing and prudently managing funds and maintaining accurate financial records.
IV.F A community foundation ensures that the foundation's financial resources are used solely in furtherance of its mission.
IV.G A community foundation has an annual audit (or financial review, when assets total less than $5 million) that is performed by an independent public accountant, reviewed and accepted by the governing body, and made available to the public upon request.
Key Elements
- If assets are less than $5 million:
- The financial review was conducted by an independent certified public accountant.
- The financial review indicates that no material modifications should be made to the financial statements.
- If assets are $5 million or more:
- The audit was conducted by an independent certified public accountant.
- The audit receives an unqualified opinion.
- Evidence of public availability of audit or financial review.
Required Documents
- Audit or financial review
- Evidence of public availability of audit or financial review (page from annual report or printout from website)
What if my audit results in a qualified opinion?
In order to be compliant with the standard, your audit must result in an unqualified opinion. Additionally, your audit must be completed by an independent certified public accountant.
An independent examination of the accounting records and other evidence relating to the organization to support the expression of an impartial expert opinion about the reliability of its financial statements.
Financial review
A review of financial statements prepared by management. Unless deemed necessary, the accountant is not required to obtain any independent corroboration to substantiate the staff information.
Independent public accountant
Independent public accountants perform many functions, including auditing financial statements, designing financial accounting systems, assisting in the managerial accounting function, providing managerial advisory services, and tax preparation.
Management letter
A letter written by the auditor to the organization's board which allows the auditor to discuss the audit process and findings, including any problems encountered with internal controls.
Opinion letter
Letter issued by a certified public accountant to accompany financial statements.
Unqualified opinion
Auditor's opinion expressed in the auditor's report which indicates of that the financial statements presented are free from material misstatements.
Reconfirming?
Review all key elements and consider if your organization has made changes to your policies, powers or practices.
Pay special attention to key elements and core materials marked with ![[R icon]](/images/icon_reconfirm_body.gif){kind=icon}
and a ![[P icon]](/images/icon_pension_body.gif){kind=icon}
. These represent minimum requirements for reconfirmation as well as Pension Protection Act requirements. Items marked with a are particularly critical for those who submitted record books prior to January 2007.
Document your compliance with each of these items as well as with all other key elements where support materials may have changed.
