1a. Planning: Key considerations for planning the audit of a not-for-profit organization include:

• The objectives and scope of the audit work.
• Any applicable local regulations governing the organization.
• Understanding the organization’s operational environment.
• The form and content requirements for financial statements and the audit opinion.
• Identification of key audit areas and related risks.

1b. Risk Analysis: Important aspects of risk analysis for a not-for-profit organization:

• Inherent risk: Nature of the entity’s activities and the associated environment.
• Control risk: Assessment of internal controls, especially cash handling, as not-for-profits often deal with cash collections and may rely on volunteers.
• Detection risk: Risk that material misstatements may not be identified due to reliance on substantive testing over controls, especially if controls are weak.

1c. Internal Control: Essential internal controls to consider in a not-for-profit audit:

• Segregation of duties, which may be challenging in smaller organizations with limited staff.
• Cash controls for safeguarding funds.
• Controls over income streams (e.g., donations, grants) to ensure completeness.
• Ensuring that funds are used exclusively for authorized purposes.

1d. Audit Evidence: Gathering audit evidence in a not-for-profit organization focuses on:

• Completeness of transaction records, assets, and liabilities.
• Verifying there is no misuse of funds.
• Using analytical procedures to validate reported figures.
• Reviewing final financial statements for appropriate accounting policies and consistency.

1e. Reporting: Key points in reporting for a not-for-profit audit:

• If legally required, use a standard external audit report.
• If the audit is voluntary, customize the report to reflect the audit’s specific objectives.
• Follow ISA 700’s structure, including title, addressee, auditor’s responsibilities, basis for opinion, audit opinion, and if applicable, emphasis of matter on going concern.