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Nonprofit organizations are not automatically required to obtain audited or reviewed financial statements. Requirements depend on revenue levels, state regulations, and the activities your organization conducts—especially fundraising and tax exemption status. 

Below is what nonprofits operating in Virginia (and across multiple states) need to know. 

Virginia Audit vs. Review Requirements for Nonprofits 

Virginia does not mandate audits or reviews for all nonprofits. However, financial reporting requirements apply once certain revenue thresholds are met, particularly in connection with state tax exemptions. 

Virginia Revenue Thresholds 

• $0 – under $750,000 in annual gross revenue
  No state-mandated audit or review is required (Note: funders or grantors may still require one.) 

• $750,000 or more in annual gross revenue
  A financial review performed by an independent CPA is required. 

• $1.5 million or more in annual gross revenue
  Virginia may require a full independent audit in lieu of a review. 

Why This Matters 

Failure to meet applicable financial reporting requirements can jeopardize a nonprofit’s compliance with Virginia tax exemption and charitable registration rules. Planning ahead and engaging MillerMusmar CPAs early helps avoid last-minute deadlines, rushed engagements, and unnecessary costs. 

Nonprofits Operating in Multiple States 

If your organization operates or fundraises outside Virginia, additional state requirements may apply. 

Charitable Solicitation Requirements 

Most states require nonprofits that solicit donations to register. Financial statement requirements vary by state and revenue level and may include: 

• No financial statements 

• Internally prepared (unaudited) statements 

• CPA-reviewed financial statements 

• CPA-audited financial statements 

Thresholds differ significantly. A nonprofit soliciting in multiple states may face multiple compliance standards. 

State Tax Exemptions 

If your organization claims sales and use tax exemptions or other state tax benefits, those states may impose separate financial reporting requirements, including reviews or audits. These rules are distinct from charitable solicitation requirements. 

Key Takeaway 

There is no one-size-fits-all audit requirement for nonprofits. Obligations depend on: 

• Revenue size 

• States of operation 

• Fundraising activities 

• Tax exemption claims 

• Grant and contract terms 

Many multi-state nonprofits choose to meet the highest required standard—often a CPA audit—to efficiently satisfy multiple jurisdictions and funder expectations. 

At MillerMusmar, our mission is to empower people to thrive every day. We are dedicated to delivering lasting, meaningful value to our team members, clients, and communities. With a people-first culture, our professionals deliver expert tax, assurance, and advisory services to a wide range of clients throughout the DMV region.MillerMusmar CPAs is a proud independent member of BDO. To learn more about our firm and services, please visit our website. www.MillerMusmar.cpa

If you have questions or need assistance implementing these strategies, don’t hesitate to reach out to us at +1-703-437-8877 or info@millermusmar.com

Written by Sara Ghanem, CPA, Audit Department at MillerMusmar CPA