An audit is the examination of the financial statements by an accounting professional to determine whether they conform to accounting standards. An "independent audit" is performed by a public accounting firm or an individual who is a certified public accountant (CPA) who is engaged to provide an independent opinion to the management on whether or not the nonprofit's financial statements/records comply with generally accepted accounting principles (GAAP). Not every charitable nonprofit is required to conduct an independent audit. Some nonprofits, because of the size of their annual budgets, or because of the sources of their funding, are required by state or federal law to conduct an independent audit. The National Council of Nonprofits offers a 50-state chart that shows audit requirements in each state.
