Get expert tax and accounting help! Call (512) 598-6251

Assurance and attestation in Austin

Audit services in Austin, Texas

Texas sets no revenue threshold for an audit. The requirement comes from a lender, an investor, a grant agreement, a board or your own governing documents. Tell us who is asking and we will tell you what they need.

Three things tell us which engagement fits

  • Who is asking
  • Reporting period
  • Deadline
Scope my audit(512) 598-6251

Who requires an audit in Texas?

Texas does not impose a general audit-filing rule on charities, though specific organizations can have separate requirements. Nonprofit corporations generally do not file Form 990 with the Attorney General or the Secretary of State. Private foundations are the exception: the Attorney General asks for a copy of the Form 990-PF (Texas Secretary of State, Texas Attorney General).

  1. What Texas requires of a nonprofit board

    Texas Business Organizations Code §22.352 requires a nonprofit corporation to keep financial records under GAAP and requires its board to prepare or approve an annual financial report conforming to AICPA standards (§22.352). The statute does not require an auditor to sign that report. Section 22.355 exempts several categories, including organizations that solicit only from their own members and those receiving under $10,000 a year from outside the membership.

  2. When Texas requires an audit

    School districts, charter schools and education service centers obtain annual audits under Texas education rules (§44.008). TEA requires the signing auditor to hold a current Texas CPA license and the firm to belong to the AICPA Governmental Audit Quality Center (GAQC). An out-of-state firm may perform the audit without a Texas firm license. The annual financial and compliance report is due within 150 days of fiscal year end (TEA guidance).

  3. When is a Single Audit required?

    If you spend $1 million or more in federal awards in a fiscal year, you need a Single Audit or a program-specific audit, for fiscal years beginning on or after October 1, 2024 (2 CFR 200.501). Texas agencies pass federal funds through to subrecipients, so an organization can cross the threshold without ever dealing with a federal agency directly.

  4. Who else can require an audit?

    A lender, an investor, a franchisor, a grantmaker, an HOA declaration or a bond covenant can each name a different report, a different framework and a different date. With no state threshold underneath them, the document in front of you is the requirement. Send it to us and we will read it before we quote.

Which standards will your audit be performed under?

Before work begins, you and the requester must agree on the accounting framework and the auditing standards.

A

The accounting framework

You prepare the statements under an accounting framework. US GAAP is one option. A special purpose framework such as cash or tax basis is another, where the recipient accepts it.

B

Auditing standards

Auditors follow standards based on who will use the report. They apply generally accepted auditing standards (GAAS) to private company work and Government Auditing Standards to audits of federal awards where required. Firms registered with the PCAOB apply PCAOB standards to audits of US public companies and broker-dealers (PCAOB registration).

Agree both before you sign an engagement letter. A recipient can send back an audit performed under the wrong standards.

Audit readiness: are your records ready to be audited?

Audit readiness means you complete these items before fieldwork starts. If any item is missing, you should expect a later completion date.

  • Bank and credit card accounts reconciled through the year end
  • A trial balance that agrees to the draft financial statements
  • Supporting schedules for receivables, payables, fixed assets, debt and leases
  • Calculations behind any estimate, including allowances and accruals
  • Signed agreements: loans, leases, grants, major contracts and board minutes
  • Restricted funds tracked separately from unrestricted, where relevant

If your books are not there yet, tell us before we agree a timetable. Auditors treat cleanup as a separate engagement and must protect independence. We can provide bookkeeping where independence rules allow.

Audit services for Texas organizations

Levels of assurance

The recipient decides which of these you need.

Businesses and investors

For companies answering to a lender, a buyer or the investors in a funding round.

  • First audit before a raise
  • Lender covenant audit
  • Private equity and venture fund audit
  • Franchise audit
  • Quality of earnings review

Nonprofits and grant recipients

Audits your board, donors or grantmakers ask you for.

  • Nonprofit audit
  • Single Audit
  • Grant compliance audit
  • Private foundation audit
  • Church audit

Government, education and public funds

Engagements where the funder or the agency sets the standards.

  • School district audit
  • Charter school audit
  • Government contractor audit
  • Yellow Book audit

Property and community associations

Boards that answer to owners under a declaration.

  • HOA audit
  • Condominium association audit
  • Property management audit
  • Real estate entity audit

Records, plans and related work

Preparing the file, and the tax, accounting and plan engagements related to an audit.

See the services index for everything the firm offers.

Not sure which of these applies to you?

Send us the covenant, grant agreement or declaration containing the audit requirement and we will scope the engagement from it.

Send us the requirement

Your first audit before a funding round

A first audit requires more setup than a recurring one. When an investor or lender asks, we plan around:

Opening balances
which means auditing the closing figures of the prior year
Revenue recognition
which we test against your contracts and compare with your invoices
Equity
where we examine SAFEs, convertible notes, option grants and valuations
Comparatives
where we review or audit prior year figures when the recipient requires them

Start the conversation before the term sheet. If you agree the timetable in the week you receive the diligence list, you have little room to move.

How an audit engagement runs

  1. 1

    Acceptance

    We confirm the users, entities, periods and deadline, then check independence and agree the engagement in writing.

  2. 2

    Risk assessment and planning

    We examine your processes and controls to decide where the risk of material misstatement is highest, then build the request list around it.

  3. 3

    Fieldwork

    We perform testing, reconciliation and confirmations with third parties. We keep open items visible through completion.

  4. 4

    Completion

    We propose adjustments, deliver the communications those charged with governance require, and issue the report.

We issue an opinion when the evidence supports it, even if the deadline is urgent.

What you receive at the end of an audit

At the end of our financial statement audit services you receive:

01

The independent auditor's report naming the statements audited, the framework applied and the opinion.

02

The financial statements and notes for the agreed periods, with comparatives where required.

03

Required communications to management or to those charged with governance, including matters we identify during the work.

04

Additional reports where the engagement calls for them, such as a Single Audit compliance report or supplementary schedules.

We retain the audit documentation and it does not form part of what we deliver to you. Ask which reports a proposal includes before you compare it with another.

What to check in an audit proposal before you sign

We scope audit services to your file. Compare each proposal for:

  1. 01Which statements, periods and entities it covers
  2. 02Which standards and framework the work will follow
  3. 03Which reports it includes and which the firm bills separately
  4. 04What the firm assumes about the condition of your records when it sets the fee
  5. 05Who will do the work, and how the firm agrees additional work

How an IRS audit differs from a financial statement audit

The word audit refers to two different services:

An IRS audit

An IRS audit is an examination of a tax return by the Internal Revenue Service. You can represent yourself or appoint an authorized representative (IRS guidance). Our representation service is separate.

A financial statement audit

A financial statement audit is an independent examination supporting an opinion on your financial statements. We perform financial statement audits when a recipient requests an independent opinion.

Neither one substitutes for the other, and an organization can face both in the same year.

Tell us who asked for the audit

Whoever asked named a period and a date. Send us those and the document itself, and we will tell you which audit services you need before you commit.

Review my audit requirement