Audit

An HOA financial audit is an examination of the association's financial statements and records conducted by an independent certified public accountant (CPA). A full audit provides the highest level of assurance — the auditor tests transactions, confirms balances, and expresses an opinion on whether the financials fairly represent the association's financial position. Less rigorous alternatives include a 'review' (limited assurance) or 'compilation' (no assurance, just preparation). Many states require audits or reviews for HOAs above a certain budget size. Community governing documents often require annual audits regardless of state law. The audit report and financials should be made available to members.

Audits detect errors, fraud, and mismanagement before they become catastrophic. They also provide credibility to the financial statements shared with buyers, lenders, and members.