Any non-Tax accounting topics go here.
CA Davis Sterling Act and Compilation
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.
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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