Many U.S. nonprofits would find it difficult to meet the standards for audit activities required of their peers in the for-profit sector, a new report says.
The audit provisions of the Sarbanes-Oxley Act, which apply to corporations only, were the subject of a survey of 5,115 nonprofit groups conducted by the Urban Institute.
The act requires corporations to have independent audit committee that includes at least one financial expert and no company employees.
Eight in 10 of the nonprofits surveyed currently do not have an independent audit committee, the report says, and more than half say it would be difficult to create one.
Of those that do not have one, more than half say it would be difficult to find a financial expert to serve on a committee.
Four in 10 nonprofits that have paid staff on their audit committees say it would be hard to remove staff from those committees.
More than two in three nonprofits received an audit by an external provider within the last two years, the report says, and more than three in four of those made their audits public.
Of those that did not have an audit, six in 10 say complying with a law requiring an external audit would be hard.