Too many of us think of audit costs as an expense to suffer, not to manage. CPA Dennis Walsh tells us differently:
Executive Director Blair Benson of the Mental Health Association of Greensboro, North Carolina, was hoping her audit costs wouldn't go up much. With a budget of $340,000, there isn't a lot to spare. But although she had expected an increase, she was stunned when her auditor said he would be increasing his fee by 40%. "An increase like this is something you just can't build into your budget," said Benson.
Audits are getting more expensive -- have you noticed?
A survey of 160 community-based nonprofits in Guilford County, North Carolina, showed recent average audit fee increases of 9%, and noted that audit costs remain a significant burden to organizations.
Under the new risk-based audit standards (Statements on Auditing Standards (SAS) Nos. 104-111), effective since 2007, your auditors must obtain a deeper understanding of your organization, its environment, and your internal control systems. "The burden for documentation, combined with . . .