Churches desiring to employ an audit with respect to their financial operations may opt for various approaches depending on their size, scope, and complexity.
By Mike Batts, CPA
Audits are conducted by parties who are either external or internal to the church. Smaller churches use internal accountability processes typically performed by members of the churches’ governing body, by its finance committee or equivalent, or by volunteer supporters. Larger churches (those with annual revenues exceeding $3 million) find it more difficult for volunteers or others to adequately perform internal accountability functions. Accordingly, they commonly engage external auditors.
External audits and other CPA-performed engagements
Churches have external audits or other accountability-oriented services performed by certified public accounting firms for various reasons. The highest and best reason for a church to have an external audit is to facilitate the church’s financial integrity and accountability and to increase the likelihood that significant internal control deficiencies, tax compliance vulnerabilities, or similar matters will come to the attention of the church’s leadership before they…
