Church audit for a non-CPA

Any non-Tax accounting topics go here.
#1
Posts:
18
Joined:
16-Oct-2021 4:01pm
Location:
Tacoma, WA
I am not a CPA. The church I do bookkeeping for has a volunteer run procedural audit performed annually. The auditor that has done is for several years now has left and the church has not been able to find a replacement. They have inquired with CPAs, but the church does not have the funds to pay for the CPAs rates. They approached me about if I was willing to do it for another church and the other churches bookkeeper or treasurer could do it for us. It is my understanding that since it is not a financial statement audit, but instead a procedural audit, I am allowed to do that as a non-CPA. Is my understanding correct? Is there anything else I should be wary of? Does anyone know of a good template for a procedural audit engagement letter (my E&O insurance carrier seems to be lacking in this department)?

I would update my services with my E&O provider.
 

#2
Posts:
6043
Joined:
22-Apr-2014 3:06pm
Location:
WA State
Unless my understanding is incorrect, only a CPA may sign an opinion on an attest engagement. An "audit" is an attest engagement.

The more important question is: Why must the church have a procedural audit conducted by a CPA?
Is there an outside organization requiring this work? If so, does it make sense to continue the affiliation if the funds don't exist to be in compliance with their requirements?
Audits of any sort are not inexpensive. As a professional, CPA or non-CPA, I would ensure I'm properly insured to perform any engagement I accept. If your E&O provider doesn't have an engagement letter in this respect, you probably aren't covered.
~Captcook
 

#3
Posts:
18
Joined:
16-Oct-2021 4:01pm
Location:
Tacoma, WA
Per the AICPA, a practitioner performing an agreed upon procedure does not issue an opinion, merely a statement of fact such as "I tested 50 invoices, 49 of them had the required trustee signature included".

A CPA audit isn't required, but an audit of certain procedures is required in their bylaws (i.e. are invoices being approved according to our bylaws, correct signing procedures for checks, etc). It is not required by an outside organization, but many churches that belong to a conference encourage it. See here is the United Methodist Churches audit guide, which discusses how non-CPAs can perform audits, which I am obviously not trusting but I wonder why they believe that.

https://www.gcfa.org/media/1343/audit_g ... 1-7-14.pdf

My E&O provided doesn't provide ANY engagement letters that I can find unfortunately.
 

#4
Posts:
6043
Joined:
22-Apr-2014 3:06pm
Location:
WA State
The AICPA isn't going to be of much help about what kind of work a non-CPA can perform.
As a non-CPA auditor, if you choose to provide this service, I'd be real careful about what kind of report you are issuing. CPAs have the franchise on certain attest engagements. That's part of what creates the value in the credential and also drives the cost of such an engagement.
If I were you, I'd call my E&O provider and have a discussion. As I mentioned above, I wouldn't operate where my insurance doesn't cover me.
~Captcook
 

#5
Posts:
18
Joined:
16-Oct-2021 4:01pm
Location:
Tacoma, WA
I appreciate your response and wanted to let you know I did the most likely right thing and told the client this isn't work I am able to do. Thanks for your feedback.
 

#6
Posts:
6043
Joined:
22-Apr-2014 3:06pm
Location:
WA State
Happy to help.
Sometimes discretion is the better part of valor.
Our firm just stopped performing financial statement audits. There just wasn't enough critical mass to have it make sense any longer.
Tough to say 'no' to opportunities, though.
~Captcook
 


Return to General Accounting



Who is online

Users browsing this forum: No registered users and 20 guests