Hope Foundation, a registered non-governmental organisation (NGO), is engaged in social welfare activities across multiple states and receives funds…

While planning the audit, the auditor may concentrate on the following: (i) Knowledge of the NGO's work, its mission and vision, areas of operations and environment in which it operates. (ii) Updating knowledge of relevant statutes especially in regard to recent amendments, circulars, judicial decisions viz. Foreign Contribution (Regulation) Act 2010, Societies Registration Act, 1860, Income Tax Act 1961 etc. and the Rules related to the statutes. (iii) Reviewing the legal form of the Organisation and its Memorandum of Association, Articles of Association, Rules and Regulations. (iv) Reviewing the NGO's Organisation chart, then Financial and Administrative Manuals, Project and Programme Guidelines, Funding Agencies Requirements and formats, budgetary policies if any. (v) Examination of minutes of the Board/Managing Committee/ Governing Body/Management and Committees thereof to ascertain the impact of any decisions on the financial records. (vi) Study the accounting system, procedures, internal controls and internal checks existing for the NGO and verify their applicability. (vii) Setting of materiality levels for audit purposes. (viii) The nature and timing of reports or other communications. (ix) The involvement of experts and their reports. (x) Review the previous year's Audit Report. Thus, a comprehensive understanding of the NGO's objectives, regulatory framework, governance structure and internal systems enables the auditor to plan the audit effectively and perform it in accordance with applicable auditing standards.