Audit Committees and Audit Planning Letters - For panic and stress-free audits!

This afternoon, Jeanette Bax-Kurtz and Karyn Nunn of Mueller Prost PC discussed ways Audit Committees can assist nfp's with audit preparation and other matters related to the audit. Some considerations they presented are:

• Selecting Audit Committee members - make an effort to select members who will further the exempt purposes of the nfp while minimizing conflicts of interest.
• General Rules Affecting Audit Committee Composition - seek out members of the public who possess expertise in the committee's role, are independent of the nfp and other members, are capable of making sound financial decisions, can understand nfp financial statements, and have a basic understanding of public audits.
• Typical Responsibilities of Audit Committees - include selecting audit firms, reviewing the audit plan and scope, approving the audited financial statements, monitoring internal controls, monitoring accounting policies and procedures, monitoring policies such as code of conduct, and conflict of interest policies, and monitoring federal and state tax filings (such as the 990).

The nfpFMA members also discussed the best way to prepare an Audit Planning Letter, in which the nfp provides the audit firm with notable changes from prior years or "need-to-know" information, and the impact of those changes and "need-to-know" information on the financials statements. Both Bax-Kurtz and Nunn agreed that Audit Planning Letters go a long way toward experiencing a successful audit.