NPO-CL-1.3.2 - Audit Engagement Letter - After Implementing SAS No. 134

Sep 15, 2026

Uploaded by Miles

NPO-CL-1.3.2 is an audit engagement letter template confirming the auditor’s understanding of services to be provided to a nonprofit organization for a defined period. It details the audit scope and objectives under GAAS and Government Auditing Standards, including audit of financial statements and related supplementary information, evaluation of accounting policies, estimates, internal control over financial reporting, and compliance with applicable laws and regulations. It also explains auditor responsibilities, limitations of audit evidence, and reporting of material issues.

LanguageEnglish

CategoryLetters

FormatPDF

Pages35

Reading Time12 min

AccessFree to download

Audit Scope and Objectives

Objectives of the Audit

Auditor’s Responsibilities for the Audit of the Financial Statements

NPO-CL-1.3.2: Audit Engagement Letter—Yellow Book—After Implementing SAS No. 134 and Related SASsa [CPA Firm’s Letterhead] [Date] [Identify the body or individual(s) charged with governance.] and [Name of Management] b [Client’s Name and Address] We are pleased to confirm our understanding of the services we are to provide for [Client’s Legal Name] for the [period, year, OR years] ended [Date(s)] . Audit Scope and Objectives We will audit the financial statements of [Name of Nonprofit Organization] , which comprise the statement(s) of financial position as of [period OR year end(s)] , the related statements of [activities, functional expenses, and cash flows OR activities and cash flows] c for the [period, year, OR years] then ended, and the disclosures (collectively, the “financial statements”) .d Also, the following supplementary information accompanying the financial statements will be subjected to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America (GAAS), and we will provide an opinion on it in relation to the financial statements as a whole [in a separate written report accompanying our auditor’s report on the financial statements OR in a report combined with our auditor’s report on the financial statements] :e, f 1. 2. 3. The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and issue an auditor’s report that includes our opinion about whether your financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of Americag [and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole] . Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. Misstatements, including omissions, can arise from fraud or error and are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment of a reasonable user made based on the financial statements. The objectives also include reporting on internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and award agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards. Auditor’s Responsibilities for the Audit of the Financial Statementsh, i We will conduct our audit in accordance with GAAS and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and will include tests of your accounting records and other procedures we consider necessary to enable us to express such an opinion.j As part of an audit in accordance with GAAS and Government Auditing Standards, we exercise professional judgment and maintain professional skepticism throughout the audit. NPO-CL-1.3.2 We will evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management. We will also evaluate the overall presentation of the financial statements, includingthe disclosures, and determine whether the financial statements represent the underlying transactions and

FAQs

What services does the audit engagement cover for the nonprofit organization?

The letter confirms an understanding of auditing the nonprofit’s financial statements and subjecting accompanying supplementary information to related procedures, with an opinion provided in relation to the financial statements as a whole.

Under which standards will the audit be conducted?

The audit will be performed in accordance with GAAS and the standards for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States.

What limitations and risks does the auditor acknowledge?

Because of the inherent limitations of audit and internal control, there is an unavoidable risk that some material misstatements may not be detected, and the audit is not designed to detect immaterial misstatements or inconsequential legal violations.

Sep 15, 2026

Uploaded by Miles