An audit gives your organization assurance that you are correctly pursuing your stated mission and eliminating or minimizing financial risks that could put your existence in jeopardy. Here are four things you need to do to make sure that risk factors are managed in such a way to continue to thrive and protect executives and board members:
- Document your financial systems. Your auditors need a detailed understanding of your organization to perform at a level that meets compliance and provides valuable feedback. The cleaner your financial documents, the smoother the audit process.
- Prepare a written investment policy. Your attention to diversifying investment risk will pay off for your organization by minimizing investment swings in a volatile market environment.
- Understand your internal controls. When you have a system of checks and balances, you lessen deficiencies in controls that can lead to fraud. Make sure that you have a whistleblower policy to help employees feel comfortable reporting fraud at an early stage.
- Identify inherent risks. Know your market environment, including competitive organizations with similar missions, to be proactive about differentiating your organization for donations. Make sure that the board is aware of inherent external risks, such as the economy or availability of financing so that you can make a plan to adjust accordingly.
Taking the above action steps will not only help you with your audit. These steps will ensure that you are implementing best practices for compliance and wise governance of your organization.