{"id":4376,"date":"2026-10-02T22:34:38","date_gmt":"2026-10-02T19:34:38","guid":{"rendered":"https:\/\/audit-mk.com.ua\/donor-ne-pryiniav-audytorskyi-zvit\/"},"modified":"2026-10-02T22:34:38","modified_gmt":"2026-10-02T19:34:38","slug":"donor-ne-pryiniav-audytorskyi-zvit","status":"publish","type":"page","link":"https:\/\/audit-mk.com.ua\/en\/donor-ne-pryiniav-audytorskyi-zvit\/","title":{"rendered":"The donor rejected the audit report: what to do"},"content":{"rendered":"

<\/p>\n

The donor returned the audit report: what that means<\/h2>\n

It is rare and expensive. The project is finished, the report is submitted, the audit is paid for, and the donor says the report does not meet its requirements. In most cases the reason is not the quality of the auditor’s work but a mismatch between the engagement and the donor’s terms of reference, and that mismatch is almost always visible before the engagement letter is signed.<\/p>\n

Until the donor accepts the report, the final tranche is withheld and the project is not closed.<\/p>\n

Six reasons for rejection<\/h3>\n
    \n
  1. The wrong type of engagement.<\/b> The donor asked for an agreed upon procedures report under ISRS 4400 and received an audit opinion on financial statements, or the reverse. These are different engagements with different outputs, and one does not substitute for the other.<\/li>\n
  2. The auditor is not independent.<\/b> The same firm kept the organisation’s books, prepared the project report, or advised on the budget. Many donors exclude this explicitly, and some require a declaration of independence attached to the report.<\/li>\n
  3. The auditor is not eligible under the donor’s rules.<\/b> Some donors require membership of a particular register, a quality control certificate, international network affiliation, or a place on the donor’s own approved list.<\/li>\n
  4. The terms of reference were not followed.<\/b> The donor supplied a terms of reference document with a required scope, sample sizes and report format, and the report does not follow it. This is the most common reason, and the cheapest to avoid.<\/li>\n
  5. Scope or period mismatch.<\/b> The report covers the calendar year rather than the project period, or omits a cost component, or covers only one of several agreements.<\/li>\n
  6. Formal defects.<\/b> No signature of the engagement partner, no certificate number, wrong currency, the figures in the report not agreeing with the financial report submitted, or no English version where one was required.<\/li>\n<\/ol>\n

    What to do<\/h3>\n
      \n
    1. Get the reason in writing.<\/b> Ask the donor for the specific clause of the agreement or terms of reference that is not met. A verbal reason cannot be acted on and cannot be put to the auditor.<\/li>\n
    2. Establish whether the defect is remediable.<\/b> A missing procedure, a wrong period or a formal defect can usually be fixed by the same auditor through an additional engagement or a corrected report. Lack of independence or eligibility cannot: a new auditor is required.<\/li>\n
    3. Go back to the auditor with the donor’s letter.<\/b> Where the engagement letter referenced the donor’s terms of reference and the auditor departed from it, the correction is the auditor’s responsibility and cost. Where the organisation supplied the terms of reference late or incompletely, it is not.<\/li>\n
    4. Agree an extension of the reporting deadline.<\/b> Do this at the same time, in writing, and before the existing deadline passes. Donors normally grant it where the reason is a report being reworked.<\/li>\n
    5. Fund a second audit.<\/b> Where a new auditor is unavoidable, check the agreement: audit cost is frequently a budget line, and the donor may permit reallocation. The cost of a repeat audit caused by the organisation’s own choice of auditor is usually not reimbursed.<\/li>\n
    6. Record what happened.<\/b> A short internal note of the reason and the correction. It is the document that prevents a repeat, and donors who ask about an organisation’s audit history respond well to it.<\/li>\n<\/ol>\n

      What to check before signing with an auditor<\/h3>\n
        \n
      • Hand the donor’s terms of reference to the auditor before the engagement letter,<\/b> and have the engagement letter refer to it by name and date.<\/li>\n
      • Confirm the type of engagement in writing:<\/b> ISRS 4400 agreed upon procedures, an ISA 800 audit of a special purpose report, or a review. Have it named in the engagement letter.<\/li>\n
      • Check eligibility against the donor’s requirements:<\/b> register, quality control certificate, any approved list, and language of the report.<\/li>\n
      • Confirm independence.<\/b> The auditor must not have kept the books or prepared the report under audit, and should provide a declaration.<\/li>\n
      • Fix the period and scope precisely:<\/b> the project period, every agreement covered, and the cost components in scope.<\/li>\n
      • Agree the deliverable:<\/b> format, language, number of copies, signatures, and the deadline, with time before the donor’s own deadline.<\/li>\n<\/ul>\n

        Five mistakes organisations make<\/h3>\n
          \n
        1. Choosing the auditor on price without showing them the terms of reference.<\/b> The cheapest quote is often for a different engagement.<\/li>\n
        2. Using the accountant’s firm.<\/b> Convenient, cheaper, and rejected by the donor on independence grounds.<\/li>\n
        3. Commissioning the audit a week before the donor’s deadline.<\/b> There is then no time for a correction.<\/li>\n
        4. Not reading the terms of reference themselves,<\/b> leaving it to the auditor, then having no basis to insist on anything.<\/li>\n
        5. Accepting the report without checking<\/b> that the period, the figures and the signatures match the financial report submitted.<\/li>\n<\/ol>\n

          Can a rejection be challenged<\/h3>\n

          Where the donor’s reason does not follow from the agreement or the terms of reference, it can. Ask for the clause, put the engagement letter and the terms of reference side by side, and reply in writing with the comparison. Where the terms of reference were met, donors do change position. Where they were not, challenging only costs time that would be better spent on the correction.<\/p>\n

          \nWho pays for a repeat audit<\/summary>\n

          It depends on the cause. Where the auditor departed from terms of reference referenced in the engagement letter, the correction is theirs to make at their cost. Where the organisation chose an auditor who did not meet the donor’s requirements, the organisation pays, and the donor usually will not reimburse it.<\/p>\n<\/details>\n

          \nCan the same firm keep the books and audit the project<\/summary>\n

          No, under the requirements of the great majority of donors, and it is a standard independence threat. Where the firm prepared the project financial report, that is a self review threat and the report will be rejected.<\/p>\n<\/details>\n

          \nHow does ISRS 4400 differ from ISA 800<\/summary>\n

          ISRS 4400 is an agreed upon procedures engagement: the auditor performs the procedures the donor specified and reports factual findings, with no opinion. ISA 800 is an audit of a special purpose financial report ending in an opinion. Donors specify which they require, and the two are not interchangeable.<\/p>\n<\/details>\n

          \nWhat if the reporting deadline has already passed<\/summary>\n

          Write to the donor at once, state the reason for the delay and give a date for the corrected report. A delay disclosed in advance is normally accepted; silence is treated as a breach of the agreement and affects the next application.<\/p>\n<\/details>\n

          If you need a review<\/h3>\n

          We have audited international technical assistance projects since 2000 and work to donors’ own terms of reference, including ISRS 4400 agreed upon procedures. Send us the terms of reference and the project period, and we will confirm whether the engagement can be performed as the donor requires. A proposal follows once we have reviewed the assignment.<\/p>\n

          <\/p>","protected":false},"excerpt":{"rendered":"

          Six reasons a donor rejects an audit report, the sequence of actions after a rejection, what to check before signing with an auditor, and whether it can be challenged.<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-4376","page","type-page","status-publish","hentry"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\n","aioseo_head_json":{"title":"MK Audit \u0410\u0443\u0434\u0438\u0442","description":"The donor returned the audit report: what that means It is rare and expensive. The project is finished, the report is submitted, the audit is paid for, and\u2026","canonical_url":"https:\/\/audit-mk.com.ua\/en\/donor-ne-pryiniav-audytorskyi-zvit\/","robots":"max-image-preview:large","keywords":"","webmasterTools":{"miscellaneous":""},"schema":null,"og:locale":"en_US","og:site_name":"MK Audit","og:type":"website","og:title":"MK Audit \u0410\u0443\u0434\u0438\u0442","og:description":"The donor returned the audit report: what that means It is rare and expensive. The project is finished, the report is submitted\u2026","og:url":"https:\/\/audit-mk.com.ua\/en\/donor-ne-pryiniav-audytorskyi-zvit\/","article:published_time":"2026-10-02T19:34:38+00:00","article:modified_time":"2026-10-02T19:34:38+00:00","og:locale:alternate":["uk_UA","ru_RU"],"og:image":"https:\/\/audit-mk.com.ua\/wp-content\/plugins\/mk-landing\/img\/og-default.jpg","og:image:width":1200,"og:image:height":630,"og:image:secure_url":"https:\/\/audit-mk.com.ua\/wp-content\/plugins\/mk-landing\/img\/og-default.jpg","og:image:alt":"MK Audit, an audit firm in Kyiv and a full member of DFK International","twitter:card":"summary_large_image","twitter:title":"MK Audit \u0410\u0443\u0434\u0438\u0442","twitter:description":"The donor returned the audit report: what that means It is rare and expensive. The project is finished, the report is submitted\u2026","twitter:image":"https:\/\/audit-mk.com.ua\/wp-content\/plugins\/mk-landing\/img\/og-default.jpg","twitter:image:alt":"MK Audit, an audit firm in Kyiv and a full member of DFK International"},"aioseo_meta_data":{"post_id":"4376","title":null,"description":null,"keywords":null,"keyphrases":null,"primary_term":null,"canonical_url":null,"og_title":null,"og_description":null,"og_object_type":"default","og_image_type":"default","og_image_url":null,"og_image_width":null,"og_image_height":null,"og_image_custom_url":null,"og_image_custom_fields":null,"og_video":null,"og_custom_url":null,"og_article_section":null,"og_article_tags":null,"twitter_use_og":false,"twitter_card":"default","twitter_image_type":"default","twitter_image_url":null,"twitter_image_custom_url":null,"twitter_image_custom_fields":null,"twitter_title":null,"twitter_description":null,"schema":{"blockGraphs":[],"customGraphs":[],"default":{"data":{"Article":[],"Course":[],"Dataset":[],"FAQPage":[],"Movie":[],"Person":[],"Product":[],"ProductReview":[],"Car":[],"Recipe":[],"Service":[],"SoftwareApplication":[],"WebPage":[]},"graphName":"WebPage","isEnabled":true},"graphs":[]},"schema_type":"default","schema_type_options":null,"pillar_content":false,"robots_default":true,"robots_noindex":false,"robots_noarchive":false,"robots_nosnippet":false,"robots_nofollow":false,"robots_noimageindex":false,"robots_noodp":false,"robots_notranslate":false,"robots_max_snippet":null,"robots_max_videopreview":null,"robots_max_imagepreview":"large","priority":null,"frequency":null,"local_seo":null,"breadcrumb_settings":null,"limit_modified_date":false,"ai":null,"created":"2026-10-02 19:35:39","updated":"2026-10-02 19:35:39","seo_analyzer_scan_date":null,"focus_keyword":null,"additional_keywords":null,"truseo_locale":null},"aioseo_breadcrumb":"

          \n\t\t\tHome<\/a>\n\t\t<\/span>\u00bb<\/span>\n\t\t\tThe donor rejected the audit report: what to do\n\t\t<\/span><\/div>","aioseo_breadcrumb_json":[{"label":"Home","link":"https:\/\/audit-mk.com.ua\/en\/"},{"label":"The donor rejected the audit report: what to do","link":"https:\/\/audit-mk.com.ua\/en\/donor-ne-pryiniav-audytorskyi-zvit\/"}],"_links":{"self":[{"href":"https:\/\/audit-mk.com.ua\/en\/wp-json\/wp\/v2\/pages\/4376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/audit-mk.com.ua\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/audit-mk.com.ua\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/audit-mk.com.ua\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/audit-mk.com.ua\/en\/wp-json\/wp\/v2\/comments?post=4376"}],"version-history":[{"count":0,"href":"https:\/\/audit-mk.com.ua\/en\/wp-json\/wp\/v2\/pages\/4376\/revisions"}],"wp:attachment":[{"href":"https:\/\/audit-mk.com.ua\/en\/wp-json\/wp\/v2\/media?parent=4376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}