What percentage of organizations have financial audits? (FAQ)

Based on NCCS's national Electronic Filing Survey of Form 990 filers (485 respondents) conducted in early 2002, we estimate that slightly less than 70% of organizations have financial audits. (The margin of error is +/-5%.) For organizations with less than $100,000 in total expenses, the percentage is around 49%. (Given the small number of organizations in this category, the confidence interval is a large +/-11%.). For organizations with total expenses greater than $500,000 the percentage having audits jumps to more than 90%.

For details on the survey methodology, consult the full report available through NCCS.

Parts IV-A and B of the Form 990 provide another source for assessing the incidence of audits. Unfortunately, items from these parts are only available for a small percentage of returns (the early ones) in the NCCS-GuideStar National Nonprofit Database ("the digitized database").

An analysis of Parts IV-A and B using the Statistics of Income sample for Form 990 filers only (not 990-EZ filers) suggest that a lower percentage of organizations, only 58%, complete an audit -- if one assumes that all audited organizations correctly completed these parts of the form. For large organizations with more than $10 mil. in total expenses, the percentage jumps to 89%, still lower than one would expect for organizations of this size.

Which set of numbers is correct? At this point, I don't believe we know, but we hope this analysis provides us with an accurate indication of the range of audit usage.

Added 06/14/2002 by tpollak, Modified 05/21/2010 by tpollak


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