Can a nonprofit change auditors at any time?

Generally yes, subject to the terms of your engagement letter or contract. Most organizations change auditors before a new fiscal year’s audit begins, so the new firm can plan the engagement from the start.

Do we need our current auditor’s permission to switch?

No. Choosing an auditor is the organization’s decision. What you do need to do is authorize your prior auditor to respond to the new auditor’s inquiries, which AICPA standards require the new auditor to request before accepting the engagement.

What does the new auditor ask the old auditor?

Under AU-C 210, inquiries typically cover the integrity of management, any disagreements with management about accounting or auditing matters, communications about fraud, noncompliance or significant control deficiencies, and the reasons for the change in auditors.

Will switching auditors make our audit take longer?

A first-year audit involves learning your organization and auditing opening balances, so it can take more of your team’s time than a repeat audit. Good records and early access to prior-year documents help.

When is the best time to switch auditors?

Before the fiscal year you want the new firm to audit has ended, ideally months ahead, so the new auditor can plan and perform interim work. If your year ends June 30, many organizations select auditors in late winter or spring.

Do nonprofits have to rotate auditors?

There is no federal requirement for nonprofits to rotate audit firms. Some boards choose to re-bid periodically. Organizations spending federal awards follow the procurement standards in 2 CFR 200.317 through 200.327 when selecting their auditor, as 2 CFR 200.509 directs.

Switching nonprofit auditors

Changing audit firms is a routine board decision. The board approves seeking proposals, selects a new firm, and authorizes the prior auditor to talk with the new one. The new auditor then audits your opening balances and plans the year. Here is how the transition works and what to prepare.

Send us your RFP Talk to a CPA

How do you switch auditors as a nonprofit?

Get board approval to seek proposals, send an RFP to several CPA firms, select and engage the new firm, notify your current auditor, and sign an authorization allowing the new auditor to make inquiries of the predecessor (AU-C 210). The new auditor then obtains evidence about opening balances, often by reviewing the predecessor's audit documentation (AU-C 510).

Why organizations change auditors

Your organization has grown

New federal awards can bring a first Single Audit, and more programs or entities can call for a firm with that experience.

Your board wants a fresh look

Many boards review or re-bid the audit every few years, often at the end of a multi-year engagement.

You want more access to your auditor

Questions between audits, clear requests before fieldwork, and partners who return calls matter to finance teams.

New finance leadership

A new executive director, CFO or treasurer often reviews outside advisors, including the audit firm.

How the transition works

1
The board decides to seek proposals
The board, finance committee or audit committee approves looking at other firms. Check your current engagement letter or contract for its term and any notice period.
2
Request proposals
Send the same request to several firms so proposals are comparable. Our free nonprofit audit RFP template includes a scoring sheet. Get the template.
3
Select the firm and sign the engagement letter
Interview finalists, check references and peer review results, and approve the new firm.
4
Tell your current auditor
Let your current firm know you have selected a new auditor for the coming year. You are not required to explain the reason.
5
Authorize the predecessor to talk to us
Before accepting an audit, the new auditor asks your permission to make inquiries of the predecessor auditor, as required by AICPA auditing standards (AU-C 210). You sign a short authorization.
6
Opening balances
The new auditor needs evidence that the opening balances are fairly stated. This often includes reviewing the predecessor’s audit documentation with their consent (AU-C 510).
7
Planning and fieldwork
The new firm learns your organization, sends a list of documents it needs, tests transactions and controls, and reports to your board.

When to start

Start before the fiscal year you want the new firm to audit has ended. Auditors plan the work, assess risk and often perform interim procedures before year end, so selecting a firm months ahead makes the first year smoother. For a June 30 year end, many organizations send RFPs in late winter or early spring. For a December 31 year end, late summer or early fall.

If you need a Single Audit, keep the deadline in mind: the reporting package is due to the Federal Audit Clearinghouse the earlier of 30 days after the auditor's report or nine months after fiscal year end. Read more about Single Audits.

What the new auditor will ask for

Audited financial statements and auditor’s reports for the last two years
Management letters and governance communications from the prior auditor
Prior Single Audit reporting packages and findings, if any
Your most recent Form 990
Trial balance and general ledger for the current year
Grant agreements and a draft Schedule of Expenditures of Federal Awards
Board and committee minutes for the year
Organizational chart and key accounting policies

For a full preparation list, see our nonprofit audit checklist.

Working with Your Virtual CPA

We audit nonprofits, churches, schools, health centers and housing organizations, including Single Audits and Yellow Book audits. When you switch to us, we handle the communication with your prior auditor once you authorize it, tell you upfront what we need, and keep your finance team and board informed through the first year. Fees are transparent and fair, quoted upfront in writing.

Switching auditors FAQs

Expert CPAs. Personal attention.

Thinking about a new auditor? Send your RFP or talk it through with a CPA.