Audits are Not Just for Public Entities
All public companies are required to have an annual audit, but some nonpublic entities must also undergo an annual audit. These include local governments, non-profit agencies, and other organizations receiving government grants that meet certain revenue thresholds.
Moreover, some financial institutions require audits of nonpublic companies based on the financing amount and/or the bank's assessment of the company's risk. Also, companies with absentee ownership (such as those owned by investment firms, or individuals who no longer run the business) may order audits as checks of their management teams.