INSIGHT

When to Change Your Nonprofit Auditor: Considerations for Southern California Organizations

Cindy Schoelen • July 8, 2026

Services: Audit Industries: Nonprofit

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For many Southern California nonprofits, the auditor relationship is one of the longest standing outside partnerships they maintain. It shapes funder credibility, board confidence, and the quality of your year-end close.

Because of that longevity, changes are often delayed until a problem becomes visible. In practice, the signals tend to build gradually. Recognizing them early gives your organization more control over timing, cost, and outcomes.

Signs It’s Time to Change Your Nonprofit Auditor

No single factor should drive this decision, but several in combination are a strong signal. Consider making a change if you recognize any of the following:

Your Auditor Has Limited Nonprofit Experience

Nonprofit audits require specific knowledge, including fund accounting, donor restrictions, and federal Uniform Guidance for organizations receiving federal awards .A firm without deep nonprofit experience may technically complete the engagement while missing issues that matter.

You’ve Had the Same Auditor for Many Years Without a Fresh Look

Auditor rotation isn’t legally required for most nonprofits, but long-tenured relationships can create familiarity that dulls professional skepticism.Many boards and audit committees periodically evaluate their auditor relationship every five to seven years to help ensure independence, objectivity, and continued value.

The Audit Process Feels Disorganized or Reactive

A well-run audit follows a predictable timeline with clear requests, regular communication, and deliverables that arrive when expected. If every year feels like starting from scratch, that’s a process problem.

You’re Receiving Findings or Material Weaknesses Repeatedly

A finding in one year is not uncommon. The same finding appearing year after year is a different issue. Recurring findings may indicate gaps in grant reporting and compliance, but they can also suggest your auditor is not offering practical, actionable recommendations to help you move forward.

Your Organization Has Grown or Changed Significantly

An auditor who was a good fit when you were a $500,000 organization may not have the capacity or technical depth for a $5 million organization with federal awards, multiple programs, and complex restricted fund structures. The auditor should scale with you.

Communication Is Inconsistent or Slow

You should be able to reach your engagement team and get timely responses during fieldwork and at year-end. If you’re regularly chasing your auditor for updates or waiting weeks for responses, that affects your close timeline and your board reporting.

Your Board or Audit Committee Has Lost Confidence

Board confidence in the audit process is part of good governance. If your audit committee is raising concerns or the management letter has stopped generating useful conversation, that’s worth taking seriously. These signs don’t always appear together, but if more than one is present, the case for a change is worth examining carefully.

What to Look for in a New Auditor

Changing auditors is also an opportunity to upgrade. When evaluating firms, here’s what to focus on.

Nonprofit Audit Experience

Ask how many nonprofit clients the firm serves, what percentage of their practice is nonprofit, and whether they have experience with organizations of your size and complexity. Familiarity with single audit requirements for nonprofits under Uniform Guidance is essential if you receive federal funding.

California Compliance Knowledge

Your auditor should have a solid understanding of California’s audit requirements for charitable organizations, including thresholds under the Nonprofit Integrity Act and the governance expectations that accompany them.

While detailed compliance filings and state registrations are typically handled by a separate function, the audit team should be able to recognize how regulatory requirements may impact nonprofit financial statements, internal controls, and audit risk. Because this level of familiarity is not universal across firms, it’s worth asking about directly when evaluating potential auditors.

Engagement Team Stability

Ask who will staff your engagement at every level and how consistent that team tends to be year over year. High turnover at the engagement level means reintroducing your organization every audit cycle.

References from Comparable Organizations

Ask for references from nonprofits of similar size, funding mix, and complexity, ideally in Southern California markets such as San Diego. Peer references reveal how a firm handles the real work, not just the pitch.

Timing and Capacity

Audit firms have busy seasons, and nonprofit audits often cluster around the same fiscal year-ends. Ask whether the firm has capacity to meet your timeline and what happens if the schedule slips.

How to Manage the Transition

Switching auditors requires some coordination but is straightforward when handled professionally. Notify your outgoing auditor early, ideally before the next audit cycle begins. Your new auditor will need to review prior-year audit workpapers and your authorization; the outgoing firm will typically respond to successor auditor inquiries and assist with transition information. Prepare your finance team for a more intensive first-year process. New auditors ask more questions and request more documentation as they build their understanding of your organization. By year two, the process typically smooths out considerably.

Since boards and audit committees generally have responsibility for selecting and overseeing the independent auditor, they should be actively involved in both the decision and the rationale for the change. Auditor transitions can prompt questions from funders or regulators, making it important to maintain clear, well-documented support for the change.

How BPM Works with Southern California Nonprofits

BPM’s assurance professionals provide audit services for the nonprofit industry across Southern California, conducting audits and reviews for organizations ranging from community-based groups to complex multi-program entities with federal funding.

BPM’s familiarity with California Attorney General requirements and federal Uniform Guidance means your audit addresses the full compliance picture, not just the financials. Where needed, we collaborate closely with BPM’s tax professionals to help ensure alignment between audited financial statements and required filings, while maintaining the independence standards required of the audit function. If you’re considering a change, contact BPM’s audit professionals.