October 2023
Tax-exempt status for nonprofit organizations allows them to devote their resources to pursuing their missions. To maintain that status, however, nonprofits must demonstrate that they are following various tax regulations and accounting rules. Failure to maintain accurate books could also result in lost eligibility for grants or other benefits. It could even result in an IRS audit. A financial review by an independent accounting or other financial professional can provide varying degrees of assurance that a nonprofit is following generally accepted accounting principles (GAAP) and keeping accurate records that are free from errors or fraud. This article describes several levels of financial review and provides tips for when nonprofits might need each type of review.
