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HOA Management Company Charlotte NCHOA Management Company Charlotte NC
HOA Management Company Charlotte NC
Carolinas Leading HOA Management Company
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(877) 252-3327
help@mycmg.com

  • Home
  • Our Services
    • Community Management
    • Accounting/Collections
    • Maintenance/Violations
    • Board Education
    • Reserve Planning
    • Legal Assistance
    • Value Added Services
  • Why Cedar?
    • Our Message
    • Our Mission
    • Testimonials
    • Our Value
    • Answers
  • About Cedar
    • Company Facts
    • Our Staff
    • Memberships
    • Careers
    • Partners & Acquistions
    • Resources
  • Blog
  • Contact Us
    • Office Locations
    • Homeowner Central
    • Pay Dues Online

Community Association Audit

The review of a homeowners association’s books is one the most important fiduciary responsibilities of a board of directors. Though the North and South Carolina Planned Community Acts only requires an audit, review, or compilation performed at the request of the majority of the board, some association’s by-laws require a specific type be completed every so often. Associations should perform a full audit of their books at least every few years whether or not they are required to by their governing documents or state statutes. A full audit ensures the association’s financial records are being properly kept and allows the board of directors the opportunity to review the year in a more depth way than the standard summary that must be submitted to the secretary of state.

There are three types of financial examination; compilation, review, and audit. In a compilation, a CPA gathers financial statements but does little else. There is no assurance any of the information contained in the statements is correct or is compliant with generally accepted accounting principles (GAAP). The CPA performing a compilation does not have to be unaffiliated with the association, but must disclose if he or she is not.

An independent CPA performs a review by analyzing the association’s accounting procedures and documents, making sure they are in compliance with GAAP. This is usually confirmed with negative assurance, meaning the CPA did not find anything to suggest the documents were not in compliance.

All audits should be performed by an objective CPA who is not affiliated with the association in any other capacity. This option is the most expensive, generally a few thousand dollars due the amount of work that goes into a full audit. There are several steps to the process, the first of which is risk assessment. In this step the CPA identifies what could go wrong when preparing financial statements or if something already has by reviewing and walking-through procedures related to cash handling and testing internal controls. They will also need to review the association’s budget, all governing documents, tax returns, and most recent audited financials. In the second step of an audit, field work, the CPA finds the relationships between an association’s balance sheets and income statement and comparing them to the last year’s. Bank statements, reserve study reports, invoices, and others are also examined. Finally, the CPA will issue an audit report with their findings, whether there were discrepancies, or providing positive assurance the books are in compliance with GAAP.

An audit may also be found to be beneficial when changing management companies, when transitioning from self-management to professional management, or when the association is transitioned from the developer to the homeowners. In all three of these instances it is important to make sure the association financials are correct moving forward and there is nothing outstanding.

In addition to a regular financial audit, it is also a good idea to perform an audit of all other association information and procedures every year. Homes may have been sold and owner contact information may be out of date. Laws may have been changed and certain procedures may need to adapt to fit the new requirements. By doing this once a year, an association can make sure they have all the necessary information and procedures to function efficiently and compliantly.

cedar video
  • Community Association Audit
  • Functions of an HOA Board of Directors
  • What is a Condominium Association?
  • Governing Documents for an HOA
  • Advantages of Professional Management
  • Management Options for an HOA
  • Why do HOAs Need Insurance
  • What is a Homeowner’s Association?
Our Community Association Management Locations
  • HOA Management Charlotte | 704-644-8808
  • HOA Management Rock Hill SC | 803-620-1388
  • HOA Management Asheville | 828-333-4404
  • HOA Management Hickory | 828-358-1245
  • HOA Management Winston-Salem | 336-793-0879
  • HOA Management Raleigh-Durham | 919-348-2031
  • HOA Management Columbia | 803-234-4444
  • HOA Management Greenville SC | 864-469-4937
  • HOA Management Mooresville | 704-235-4902
  • HOA Management Greensboro | 336-690-5001
  • HOA Management Charleston | 843-416-5038
  • HOA Management Hilton Head | 843-547-0206
  • HOA Management Myrtle Beach | 843-286-5545
  • HOA Management Wilmington | 910-782-1143
  • HOA Management Knoxville | 865-314-8562
  • HOA Management Nashville | 615-488-0684
  • HOA Management Chattanooga | 423-405-7050
  • HOA Management Memphis | 901-440-3067
Recent News
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    May 11, 2022
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    May 4, 2022
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    April 28, 2022
  • Worker Compensation Insurance: Will Your HOA Benefit From It?
    April 12, 2022

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Cedar Management Group
PO Box 26844
Charlotte, NC 28221

Phone: (704) 644-8808
Toll Free: (877) 252-3327
Fax: (800) 334-0526

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