For many association leaders, preparing for the annual audit is one of the most stressful times of the year. Scrambling for receipts, chasing down chapter treasurers, calculating event revenue, and answering last-minute auditor questions can be overwhelming, leaving you burned out.

However, with the right preparation and modern financial infrastructure, you can ease the burden on you and your team and start leveraging the audit process to build trust with your board and members through a commitment to financial transparency, strong governance, and responsible stewardship of member dues. In this guide, we’ll walk you through the essential steps to prepare for a smooth, successful audit.

1. Gather and Organize Core Financial Statements

The foundation of any association audit is the accuracy of your core financial statements. Before your auditors arrive, ensure your Statement of Financial Position and Statement of Activities are fully reconciled. Discrepancies here are often the first red flag for auditors.

Jitasa’s guide to creating a statement of financial position defines the term as “a report that provides a snapshot of your nonprofit’s financial health. It summarizes key data in your organization’s accounting system so you can analyze it more easily and draw actionable conclusions.”

Your Statement of Activities goes a step further, detailing how your association’s transactions and activities (like educational programs or events) further your mission. 

Special Consideration for 501(c)(6) Associations

For trade and professional associations, auditors often look closely at how member dues are used, especially when lobbying or advocacy is involved. Separating lobbying expenses from standard operational costs is critical.

A banking setup that allows you to clearly categorize funds can save hours of explanation and reduce audit risk.

2. Reconcile Event Revenue With Registration Data

Annual conferences, trade shows, and regional events are major revenue drivers for associations, which means auditors will examine them closely.

To prepare:

• Match event registration data from your event management platform to deposits in your general ledger
• Confirm that ticket sales, sponsorships, and exhibitor fees all have corresponding bank transactions
• Clearly document refunds, credits, or deferred revenue for future events

This reconciliation proves that your event operations are financially sound and that reported revenue is complete and accurate, an essential part of any association's annual audit guide.

3. Centralize Oversight for Multi-Chapter Organizations

Managing finances across multiple chapters is one of the most common pain points in association audits. Auditors require visibility into the entire organization, not just the national office. That includes local chapter accounts, leadership changes, and compliance status.

Crowded suggests multi-chapter organizations use a banking platform that allows the national office to maintain oversight without micromanaging every little transaction. This makes it easier to track:

• Chapter treasurers
• Changes in chapter addresses or leadership
• Tax filing and compliance statuses
• Account balances and transaction activity

This transparency ensures that no funds are "hidden" in a local chapter account, making the consolidation process that much faster.

4. Verify Donation and Grant Restrictions

If your association accepts charitable donations or grants, particularly through a related foundation, you must demonstrate that those funds were used according to the donor's intent. Auditors will specifically test for compliance with "donor-restricted" funds.

Using restricted funds incorrectly can:

• Damage donor trust
• Trigger compliance issues
• Result in negative audit findings

You should be able to show a clear paper trail linking each restricted donation to its intended expense. When you use tools optimized for charity donation processing, you can more easily tag and track these funds from the moment they enter your account. 

This prevents the accidental commingling of restricted and unrestricted funds, which is a common finding in nonprofit audits.

5. Review Internal Controls and User Permissions

In addition to reviewing your association’s numbers, auditors will also evaluate your internal controls to ensure there are checks and balances preventing fraud or error.

Associations are particularly vulnerable to control gaps because they often rely on a mix of remote staff, volunteers, and rotating board members. Before your audit:

• Review who has access to your bank accounts and financial software. Ensure that the person writing the checks is not the same person reconciling the bank statement. 
• Verify that former stakeholders no longer have digital access to your funds. Auditors will look for digital audit trails that show exactly who approved a transaction and when.
• Implement dual approvals for expenses over a certain threshold.

Strong internal controls demonstrate that your association prioritizes financial stewardship and risk management.

Preparing for an audit can feel daunting, but it is also an opportunity to strengthen your association's operations. By centralizing your financials, reconciling event revenue, and maintaining strict internal controls, you can feel confident that your audit won’t hit any snags.

Start gathering your documentation early, and work with your finance team to close any gaps in your records. A clean audit is one of the strongest ways to demonstrate credibility, transparency, and value to your board and your membership.