Business District

While the following is not a complete list, it is representative of the information an auditor is likely to require:

Confirmations
A confirmation is an independent statement which supports the financial information in your records. Auditors will ask you to prepare confirmation letters on your letterhead (they will provide the format) to your bank(s), funders, attorney, people, and organizations you owe money to and who owe you money to confirm the amounts reflected in your books. Confirmations are mailed by and returned directly to your auditor to ensure their credibility.

Evidence of Internal Controls
The auditor will either meet with staff members or request that they complete a questionnaire documenting the procedures related to spending and receiving money and other resources, complying with laws, donor restrictions and regulations (if non-profit), maintaining property and equipment, and recording financial information in the books.

Documentation.
The auditor will request a number of schedules (lists) of information related to the following:

Assets

Accounts Receivable -- Who owes you money, how much, when it was due?

Property and Equipment (Fixed Assets) -- When acquired, how much you paid, how long they are expected to last, how much they are depreciated each year, and how much has been depreciated to date?

Liabilities

Payables -- Who you owe money to, how much you owe each individual/organization? Copies of invoices or loan agreements.
Deferred Revenue -- If you have deferred any revenue due to any conditions or restrictions, provide the information noted under Grants and Contributions, in the Revenue section below.

Revenue

Grants and Contributions--Funder/donor names and addresses, grant period, grant amount, when received, restrictions, and copies of the grant letters and grant applications. In the case of individual contributions, your auditor will specify which donors to include on this list based on a minimum level of contributions they will establish for you based on your overall budget and total contributions.

Donated services and materials--You may be required to place a dollar value on contributions of certain services and materials. Prepare a list of these donations to discuss with your auditor.

Special events and benefits--Show income and expenses, and documentation for the value of goods or services that donors received (and, therefore, are not included in the tax-deductible portion of their payment.)

Documentation--such as contracts and invoices, names and addresses, registrations, etc. for fees from memberships, tuition, performances, and other services.

Inventory--If you sell t-shirts, books, or other products, keep a record of sales throughout the year so that beginning inventory can be reconciled with inventory at the end of the year.

Expenses

Payroll records, including federal and state tax returns related to payroll, vacation records.

ADDITIONAL INFORMATION
In addition to the schedules noted above, be prepared for the auditor to review the following items:

Board minutes

Leases and other contracts

Bank statements, bank reconciliations, checkbooks, and canceled checks

Financial files for paid bills and deposits

Components of the accounting system -- chart of accounts, journals and ledgers, printouts if the system is computerized, trial balance, etc.

Budget for the fiscal year being examined

Finally, you will want to consider the non-financial aspects of the audit. The staff should understand what is involved in an audit, that it is a routine examination of financial and other information, and that they may be asked a few questions in relationship to that examination. You should assign one person to be the audit coordinator. In a small company, that may be the bookkeeper or executive director. In a larger organization, it may be the finance director. The audit coordinator should have access to all in formation the auditors may need, and should plan to be available to the auditors while they are on-site. In addition, some thought should be given to setting aside a physical location for the auditors so they can work efficiently.