Consequently, before deciding to engage an auditor to perform an audit or review, you should determine whether you really need one, or whether a compilation will do just as well. Here are some factors to consider:
- Your need for financing; do you need a substantial amount or can you make do with a smaller amount?
- Are your books in good order, or does your accounting system deliver reliable financial information?
- Your relationship with the funding source. They may be willing to grant you more leeway in meeting financial reporting requirements depending upon your credit history with them or commitment to achieving your organization’s mission. The IRS is an example of the latter case, as I learned when I applied for tax-exempt status for a non-profit organization. A well-documented mission statement on IRS form 1023, followed by examples of activities consistent with my client’s mission went a long way towards obtaining the tax exemption.