Audit committee guide for nonprofit organizations
Key takeaways
The role and responsibilities of an organization's audit committee have received considerable attention in recent years following several public financial and compliance reporting incidents. In response, more comprehensive regulations have been established to improve the integrity and reliability of financial statements. With a higher level of public and government scrutiny, it has never been more important for nonprofit audit committees to be informed regarding organizational activity and be vigilant in enforcing guidelines.
Unfortunately, one size does not fit all when establishing the size and structure of an audit committee. The committee must understand the organization's unique programs, operations and governance policies to be a sufficient check and balance over management.
The audit committee and governing board must insist upon integrity, accuracy and transparency in financial reporting, and compliance with laws and regulations. As a system of checks and balances over management, the tone at the top is set by:
Learn about the duties of the audit committee and ensure that your organization has the resources and capacity to effectively manage the financial and compliance reporting process.