Using CPA Firms and Understanding Their Functions

A not-for-profit organization enters a relationship with an independent CPA firm because of a requirement in its bylaws or because it is forced into the relationship by a third party. This chapter discusses three types of services CPA firms offer not-for-profit organizations-audits, reviews, and compilations-as well as other services firms sometimes offer. A certified audit by an independent CPA firm is the most common service used by a not-for-profit organization. Once the audit fieldwork has been completed, the CPA firm issues one of four types of opinions on the financial statements: unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion. The next step down from an audit is a review of the financial statements. Often an organization wants a relationship with a CPA firm but cannot afford or does not need an audit or a review. The next step down is called a compilation. Controlled Vocabulary Terms Certified public accountant; Financial audit; Financial statement