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HOA Financial Statement Audit Requirement @ $50K?

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#1
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Our firm is in the process of performing the last financial statement audit we'll be performing...likely ever.
I discussed performing an Agreed Upon Procedures engagement for this particular HOA as an alternative. In doing a little more research, I discovered that WA State law mandates a financial statement audit for ALL HOAs with annual assessments greater than $50K. This is an incredibly low threshold to mandate a financial statement audit, which hasn't been updated since 1995.

My question to you, do you know if this is a common threshold/requirement in other states?
~Captcook
 

#2
MikeH  
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In California, a Review is required if assessments > about $75k.
Mike Hartfield, CPA
Canyon Country, California
Office: 661/309-4681 Cell: 818/433-5359
 

#3
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I suppose the "out" is that an association can waive the audit req if 67% vote to do so. That still leaves a pretty big expense if that vote doesn't land.
~Captcook
 

#4
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There is a bill in the NC General Assembly at the moment, to require audits where revenue, expenses or account balances are $150,000 or more. That will not affect many in my area, but those with amenities will get hit.

In NC, one does not have to be a CPA to do an audit, but only CPAs will be able to do the audits required by this legislation. So if red and blue states are starting to require this, who is behind it?
 

#5
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SumwunLost wrote: So if red and blue states are starting to require this, who is behind it?


The WA law was enacted in 1995 with no adjustment for inflation.
~Captcook
 

#6
jon  
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There is a CPA firm with their main office being in FL, but now offices in several states who specialize in HOA accounting compilations, reviews, and audits. Their charges are really low. When they came to my State there were a lot of CPA firms that could not compete with their audit prices and gave up trying.
 

#7
eze  
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jon wrote:There is a CPA firm with their main office being in FL, but now offices in several states who specialize in HOA accounting compilations, reviews, and audits. Their charges are really low. When they came to my State there were a lot of CPA firms that could not compete with their audit prices and gave up trying.


I'm involved in an HOA as on investor/owner, and yes, the "audit" fe is crazy low. There is no way they are doing a real audit....but I don't complain, it's better than nothing and our HOA is very well funded.
 

#8
MikeH  
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Eze:

In California, they are only required to do a review, not an audit.
Mike Hartfield, CPA
Canyon Country, California
Office: 661/309-4681 Cell: 818/433-5359
 

#9
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Farmington, Michigan
CaptCook wrote:$50K. This is an incredibly low threshold to mandate a financial statement audit, which hasn't been updated since 1995.

In MI it's $20K and the law was passed in 2014. Though the HOA has the option to vote out of the requirement or do a review. This firm states they'll do the review for $850, http://www.michigancommunityauditors.com/
Dave

Taxation is the price we pay for failing to build a civilized society. ~ Mark Skousen
 


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