A reason for a nonprofit organization to be audited is to
A) comply with the laws requiring them to be audited.
B) meet requirements of lenders or funding sources.
C) have a professional accountant perform their bookkeeping.
D) ensure that their financial statements do not contain errors.

Question

Quizplus · Accepted Answer

Nonprofit organizations may be required to undergo an audit by lenders or funding sources as a condition of receiving funding or loans. This is to ensure that the organization is managing their finances properly and using the funding for the intended purposes. Compliance with laws regarding audits is also important, but typically not the primary reason for an audit. Professional bookkeeping and error-free financial statements are important aspects of an audit, but not the overall reason for it.

A Reason for a Nonprofit Organization to Be Audited Is