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CA Davis Sterling Act and Compilation

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#1
gsnook  
Posts:
29
Joined:
10-Oct-2014 10:32am
Location:
La Quinta, CA
Under the CA Davis Sterling Act an HOA is required to do a reviewed financial statement if gross receipys equal or exceed $75,000 during the year. If the client chooses not to do the required review, does that preclude a CPA from doing a compilation for them? Clearly they will not be in compliance with the Act by not doing a review, but would issuing a compilation report be prohibeyws at that point and considered misleading? Any thoughts would be greatly appreciates.
 

#2
eze  
Posts:
193
Joined:
8-May-2014 7:02pm
Location:
Grey Area, California
Client decides what the ultimate engagement is. You can only advise the client. However, a client knowingly violating HOA provisions is a high risk client even for a compilation. That's one I'd run by my insurance carrier. And comps require peer review.
 


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