Why is Audit so Expensive
By Leslie Evans, Executive Director Understanding the Rising Cost of Audit Services We understand that our clients are concerned about the rising cost of audit services. The Federation shares these concerns and is actively investing resources to find more efficiencies. However, we are also battling increased standards and regulations through Chartered Professional Accountants (CPA). Your auditor has to work through new “standards of quality management.” For example, the new standards require auditors to include assessing your data security as part of their audit. In addition, inflation has seen significant increases in cost of insurance, staffing and software related to the delivery of our audit services. Here are some other insights that might help you understand the current environment: 1. Increased Compliance = Increased Workload for Every Audit Recent changes in CPA standards and audit regulations have significantly increased the amount of documentation and testing required during audits. These are industry-wide mandates aimed at ensuring transparency, accountability, and long-term sustainability for all organizations. All audits in Canada must follow Canadian Audit Standards (CAS) as issued by Auditing and Assurance Standards Board (AASB). There is zero flexibility for licensed firms to “scale back” procedures — even for non-profits. CPA reviews your auditor for CAS compliance, regularly. Failure to comply is a professional risk where they could lose face disciplinary action or even lose their designation. 2. Most Audit Files Require Extensive Correction In over 90% of audits we perform, we uncover material misstatements that must be corrected to ensure compliance with non-profit accounting standards. This means we’re not just examining your financial data — we’re actively helping prevent financial inaccuracies that could lead to serious consequences. 3. The Cost of an Audit Reflects the Reality of the Work While we aim to provide affordable audit services for non-profits, correcting major financial issues significantly increases the time and expertise required to complete an audit. We approach this work thoroughly to protect your organization’s integrity and compliance but also to meet national auditing standards. We cannot cut corners — the audit process is regulated. 4. You’re Getting More Than an Audit What we provide often goes well beyond a traditional audit. We help clients correctly report using non-profit accounting standards, clean up financial records, create schedules, produce initial financial statements to be audited and meet governance standards — services that for-profit firms won’t offer, or otherwise charge much more for. We are experts in non-profit and charitable audits. 5. Our Goal Is to Reduce Audit Costs Over Time We’re working toward a future where your audits are cleaner and faster. With the right training, preparation tools, and year-round support, we can help your team improve internal financial processes and reduce audit-related costs. These tactics will involve helping you improve your record keeping and preparation for audit. 6. We Keep Costs as Low as Possible Despite increasing requirements, we do not pay our staff market rates and continually look for ways to keep our services affordable. We are committed to providing high-quality audits at the most reasonable cost. We have, for city partners, leveraged a subsidy to help with the rising cost of audit services. We will need to renew this subsidy at the end of 2026. 7. You’re Not Alone — This Is an Industry Shift These changes are not unique to us or to your organization. Non-profits across the country are experiencing similar increases in audit time and complexity due to updated standards. For example, our organization’s audit went from $11,500 to $22,500 in 2025, alone. 8. This Is a Partnership, Not Just a Financial Audit We understand that rising audit costs are a challenge — but we also know the risk of under-reporting or errors can be even greater. We don’t just conduct audits — we help your organization meet its financial responsibilities with confidence and clarity. We take pride in guiding non-profits through these complex requirements with integrity and care. 9. Open to Dialogue and Collaboration We are always open to discussing how we can help your team prepare more efficiently for audits. Let’s work together to manage both compliance and the cost of your next audit.
Audit Supporting Documents
By Nancy Murdoch, Chartered Professional Accountant What Are Audit Supporting Documents? Think of audit supporting documents as “evidence” that an auditor can use to verify that journal entries in the books are accurate, complete and recorded in the correct fiscal year. There are several types of audit evidence, like Memos, third parties prepared documents, oral, physical, analytical, and electronic evidence. For something to qualify as strong audit evidence, it needs to have two main characteristics: reliability (meaning it can be trusted and verified) and relevance (it should directly tie into the audit objectives). Examples of audit evidence include: Bank statements Invoices and receipts Physical inventory counts Contracts and agreements Email correspondence (note: not the most reliable) Sales and purchase orders Bank confirmations Why do Auditors Need Supporting Documents? In order for auditors to verify that journal entries in the books are accurate, complete, and recorded in the correct fiscal year, we need to compare the journal entries with independent evidence. So, your support documents should always be clear, clean, and include the following: Amount Date Description and signature, if possible What Should You Consider When Senging Supporting Documents? When we ask for supporting documents, it’s to back up a specific journal entry recorded by your bookkeeper/treasurer or to verify the balance of an account in your trial balance (like the ending balance of a bank account or GIC investment). Make sure the document clearly shows the amount, dates, and description we need. For example, if we ask for documentation for a specific revenue (like a donation or hall rental revenue), but that revenue was deposited into the bank along with other deposits in one lump sum, we need the actual deposit slip—not just the bank statement. This helps us see the deposit breakdown and find the specific amount we’re checking. The same idea applies to all the documents, such as Expense Reimbursement reports. Documents Prepared by Client (“PBC”) If your auditor requests a document that is prepared by your association, such as “continuity schedules,” “aging summaries,” lists”, “calculations”, or any other files as requested, make sure that these documents are clear and, if possible, sent to us in Excel format. Why? We are requesting this document as “evidence” to support an account balance. Therefore, it’s really important that the total on the file you send matches the account balance. For example, if you send us the hall rental list (which usually includes a column for damage deposits), make sure the totals for revenue and damage deposits match the hall rental revenue and damage deposit accounts in your books. If the document does not match the account balance, it cannot be used as a supporting document, and there’s no point in preparing it or sending it to us. When to Send in Your Supporting Documents? We typically assign our technicians a maximum of two weeks to work on your file. So, it’s important that we can communicate back and forth quickly to stay on track. Here’s a quick breakdown of the typical audit process: Day 1-2: Our technicians will review your GL and TB, then select samples to test accounts like expenses, revenues, and assets. You’ll receive an email from us listing the samples we selected and what supporting documents are required (mostly invoices, deposit slips, hall rental details, membership schedules, etc.). After a week: By this point, our team will have a better understanding of your accounts and may ask for more specific documents, like agreements, contracts, continuity schedules, or other ad hoc items based on your accounts. End of second week: Once we’ve got everything we need, it usually takes our team 3-4 days to review and document your supporting documents in our audit file. After that, the file goes to the auditor for review. Most of the time, this triggers a third round of questions from the auditor—this could be for clarifications or requests for additional documents to back up specific balances. Once you’ve provided all the requested information, the auditor will start drafting your financial statement and wrap up the file. .elementor-63423 .elementor-element.elementor-element-3c179177{margin-top:0px;margin-bottom:0px;}.elementor-63423 .elementor-element.elementor-element-7c4330f6{–spacer-size:50px;}.elementor-63423 .elementor-element.elementor-element-3ab4fec8 .premium-dual-header-first-header span{display:inline;}.elementor-63423 .elementor-element.elementor-element-3ab4fec8 .elementor-widget-container{text-align:center;}.elementor-63423 .elementor-element.elementor-element-3ab4fec8 .premium-dual-header-first-span{font-family:”Avenir”, Sans-serif;font-weight:800;}.elementor-63423 .elementor-element.elementor-element-3ab4fec8 .premium-dual-header-second-header{font-family:”Flood STD Regular”, Sans-serif;font-size:57px;line-height:45px;color:#72BC44;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-grid-post-holder{background-color:#fff;box-shadow:0px 0px 10px -4px rgba(0,0,0,0.5);}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-grid-post .eael-entry-footer{justify-content:flex-start;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-grid-post .eael-entry-header-after{justify-content:flex-start;align-items:center;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-entry-footer{margin:10px 10px 10px 0px;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-entry-header-after{margin:10px 10px 10px 0px;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-entry-title a{color:var( –e-global-color-accent );}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-entry-title:hover, .elementor-63423 .elementor-element.elementor-element-0e10514 .eael-entry-title a:hover{color:var( –e-global-color-accent );}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-entry-title, .elementor-63423 .elementor-element.elementor-element-0e10514 .eael-entry-title a{font-family:”Avenir”, Sans-serif;font-weight:500;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-grid-post .eael-entry-overlay{background-color:rgba(0,0,0, .75);}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-grid-post .eael-entry-overlay > i{color:#ffffff;font-size:18px;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-grid-post .eael-entry-overlay > img{height:18px;width:18px;}.elementor-63423 .elementor-element.elementor-element-0e10514 .eael-post-elements-readmore-btn{font-weight:700;text-transform:uppercase;color:var( –e-global-color-accent );}.elementor-63423 .elementor-element.elementor-element-1a19929e{–spacer-size:25px;}.elementor-63423 .elementor-element.elementor-element-31d979e2 .elementor-button{font-family:”Avenir”, Sans-serif;font-weight:700;text-decoration:none;background-color:#348F6F;border-radius:0px 0px 0px 0px;padding:12px 44px 12px 45px;}.elementor-63423 .elementor-element.elementor-element-31d979e2 .elementor-button:hover, .elementor-63423 .elementor-element.elementor-element-31d979e2 .elementor-button:focus{background-color:#72BC44;}.elementor-63423 .elementor-element.elementor-element-31d979e2 > .elementor-widget-container{margin:0px 0px 0px 0px;padding:0px 0px 0px 0px;}.elementor-63423 .elementor-element.elementor-element-31d979e2{width:100%;max-width:100%;}.elementor-63423 .elementor-element.elementor-element-2595fc85{–spacer-size:50px;}@media(max-width:1024px){.elementor-63423 .elementor-element.elementor-element-31d979e2 .elementor-button{padding:12px 35px 12px 37px;}.elementor-63423 .elementor-element.elementor-element-31d979e2{width:100%;max-width:100%;}}@media(max-width:767px){.elementor-63423 .elementor-element.elementor-element-31d979e2{width:100%;max-width:100%;}}/* Start Custom Fonts CSS */@font-face { font-family: ‘Avenir’; 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