The World Health Organization declared COVID-19 a global pandemic on March 15, 2020, and for the past year, organizations of all kinds have gone through tremendous change and disruption. However, one group of organizations has been impacted in a particularly strong way: nonprofits.
Among other reasons, the requirement to conduct audits for non-profits has presented a challenge. From the elevated potential for fraud risk to the practical difficulties of a remote audit, auditors need to be flexible and diligent to accomplish their work successfully.
One of the challenges faced by many in the sector is the seemingly simple question: Do we conduct the audit now or do we wait? Take, for example, an organization that requires evidence of services rendered or production quotas to meet the terms of agreements for funding from foundations. If that organization was performing well in 2019, went into 2020 with high expectations, and then the pandemic hit, how should losses or promised revenue be recognized?