Introduction
The New York subsidiary audit requirements apply to both for-profit and nonprofit WOS entities. Transitioning through audits can seem daunting. However, understanding key thresholds and steps ensures smoother compliance.
Understanding New York Subsidiary Audit Requirements
Audit Triggers for For-Profit Subsidiaries
- Contractual Clauses: Many government and corporate contracts include audit stipulations.
- Investor & Lender Mandates: Financial agreements often require audited statements.
- Voluntary Assurance: Companies seeking higher transparency may opt for audits to build stakeholder trust.
Audit Thresholds for Nonprofit Subsidiaries
- Revenue Over $1 Million: Must file an audited financial statement with the New York Attorney General’s Charities Bureau.
- Revenue Between $250,000–$1 Million: Requires a CPA-prepared review report.
- Expending Federal Funds Over Threshold: Nonprofits spending ≥ $1 Million in federal awards face additional Single Audit rules.
Federal Single Audit Requirements
Entities—regardless of structure—that expend more than $1 Million in federal awards must conduct a Single Audit under OMB Uniform Guidance. This audit verifies compliance with federal funding rules and ensures proper use of public dollars.
Steps to Prepare Your New York Subsidiary for Audit
- Assess Legal Structure & Revenue: Clarify your WOS’s entity type and annual revenue.
- Review Contracts & Funding: Identify any audit clauses in agreements and federal funding sources.
- Engage an NY-Licensed CPA: Select a firm experienced with New York State’s audit landscape.
- Strengthen Internal Controls: Document processes, approvals, and reconciliations.
- Schedule Pre-Audit Reviews: Conduct mock audits to uncover and resolve issues early.
Ready to ensure seamless compliance? Contact our expert audit team today for a tailored review of your New York subsidiary audit requirements and turn audit challenges into confidence.
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Harshaditya Kabra
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