External Audit

An external audit is an independent examination of a nonprofit’s financial statements and accounting records by a certified public accountant (CPA) or external audit firm. The primary objective is to assess whether the organization’s financial reports are accurate, complete, and in accordance with generally accepted accounting principles (GAAP) or other relevant standards. The auditor evaluates internal controls, tests transactions, and issues an opinion on the fairness of the financial statements. For nonprofits, an external audit may be required by funders, regulators, or bylaws, and it can help demonstrate transparency, accountability, and financial stewardship to stakeholders.