10 Questions Board Members Should Ask The Auditor

For many nonprofit board members, the annual audit may feel like a behind-the-scenes process handled by the finance team. But as a board member, especially if you serve on the finance or audit committee, you play an essential role in financial oversight. And one of your most valuable opportunities for insight comes at the end of the audit, when you meet with the auditors.

So, what should you ask? Here are several important questions that can help you better understand the financial health of the organization, identify potential risks, and fulfill your fiduciary responsibilities.

1. Did you identify any significant issues or concerns during the audit?

Start by asking the auditor if there were any red flags. This could include internal control weaknesses, unusual transactions, or areas of noncompliance. Even if the audit results in an unmodified (clean) opinion, there may still be observations worth discussing.

2. Were there any adjustments made to the financial statements?

Auditors sometimes propose journal entries to correct misstatements. Ask whether any were made, whether management agreed with them, and what caused them in the first place. Frequent or significant adjustments could be a sign that financial reporting processes need improvement.

3. Did you encounter any difficulties working with staff or getting documentation?

If the audit was delayed or difficult, that’s something the board should know about. It might indicate a lack of adequate staffing, outdated systems, or deeper organizational issues.

4. Are our internal controls functioning effectively?

Even if the audit didn’t find reportable weaknesses, auditors may have noticed areas where internal controls could be strengthened. Normally auditors don’t test your organization’s internal controls, but they are required to gain an understanding of them.  Ask if they have recommendations, this is especially helpful for preventing fraud or errors in the future.

5. Do you have any management letter comments or informal suggestions?

Not everything rises to the level of a formal finding. Auditors often provide a management letter with best practices or opportunities for improvement. These suggestions can be incredibly valuable.  View these recommendations as an opportunity for the organization to improve and become more effective.

6. How does our organization compare to others you audit?

If your auditor works with similar nonprofits, they can often provide helpful benchmarks. For example, how do your reserves, administrative costs, or revenue diversity stack up? This question can prompt broader strategic thinking.

7. Is there anything new on the horizon that we should be preparing for?

Audit firms stay up to date on changing accounting standards and regulatory requirements. Ask if there are upcoming changes that could affect your nonprofit’s financial reporting, compliance obligations, or audit process in the coming year.

8. Do you have any concerns about the organization’s ability to continue as a going concern?

Auditors are required to assess whether there is substantial doubt about an organization’s ability to continue operating. Even if no issues are noted, it’s a good idea to ask directly, especially if your nonprofit is facing financial challenges.

9. Were there any indications of fraud or risk areas we should monitor more closely?

While auditors aren’t responsible for detecting all fraud, they are required to assess the risk of it. Ask them to speak candidly about any concerns or areas where you may want to heighten oversight.

10. What can we do as a board to better support the financial oversight process?

This shows that you’re not just checking a box, you’re actively engaged in good governance. Auditors may offer insight into how the board or finance committee can improve its financial literacy, communication with management, or engagement with the audit process.

Asking good questions at the end of an audit doesn’t require accounting expertise, just curiosity, commitment, and a willingness to learn. These conversations help ensure transparency, foster a culture of accountability, and ultimately strengthen your nonprofit’s financial foundation.

So don’t be afraid to speak up. Your questions matter.