DOHAN CPA
Insights & Tips/Assurance & Attest

HOA Audits: Independent Assurance for Better Decisions

A pillar guide to Florida HOA and condominium association audits — when one may be required, what the engagement covers, how the process runs, and how Dohan CPA supports readiness.

Assurance Services

Dohan CPA provides HOA audits for Florida homeowners’ associations, condominium associations, community association managers, boards, lenders, and developers preparing for turnover. Our objective is clearer financial reporting, stronger stewardship of association funds, and practical readiness for owner, lender, statutory, or governing-document requirements. This guide explains when the service may be needed, what the engagement addresses, how the process works, and how management can prepare.

Who HOA audits are for

Dohan CPA’s HOA audits are designed for Florida homeowners’ associations, condominium associations, community association managers, boards, lenders, and developers preparing for turnover. The engagement is organized around the reporting needs of the people who will actually use the statements, rather than treating the audit as a generic year-end exercise.

The intended result is clearer financial reporting, stronger stewardship of association funds, and practical readiness for owner, lender, statutory, or governing-document requirements. Management remains responsible for the financial statements, underlying records, estimates, controls, and representations; the independent CPA is responsible for planning and performing the engagement and reporting in accordance with the applicable professional standards.

When an audit may be needed

An audit may be required by the applicable Florida statute, governing documents, lender or other agreement, or may be selected voluntarily by the board. The exact requirement depends on association type, annual revenue, elections permitted by law, and the documents in force. Florida condominium rules and homeowners’ association rules are not identical, so eligibility should be confirmed before the engagement is scoped.

Before accepting a timetable or quote, identify the reporting entity, fiscal period, financial reporting framework, intended users, required report language, delivery date, and any compliance or supplemental schedules. A requirement in a loan, contract, statute, regulatory agreement, or governing document should be read directly rather than summarized from memory.

What makes this engagement different

Community associations operate with assessment revenue, restricted or designated reserves, vendor-heavy disbursement cycles, board oversight, and high expectations for transparency. The accounting records must connect the adopted budget, owner ledgers, bank accounts, reserve activity, contracts, and year-end financial statements.

A strong engagement therefore combines technical accounting, industry knowledge, disciplined project management, and timely communication. The audit is more efficient when key schedules reconcile before fieldwork and questions are routed to people who understand the underlying transaction.

Areas commonly addressed

The scope is risk-based and tailored to materiality and the applicable standards. Common areas include:

  • Assessment revenue reconciled to owner ledgers, deposits, and the general ledger
  • Reserve balances, reserve expenditures, and transfers between operating and reserve accounts
  • Cash disbursements, vendor approvals, invoice support, and potential conflicts of interest
  • Insurance proceeds, special assessments, loans, capital projects, and developer activity
  • Cutoff for prepaid assessments, accounts payable, accrued expenses, and unrecorded liabilities
  • Financial statement presentation and disclosures specific to common-interest realty associations

Our audit approach

The exact procedures vary with assessed risks, but a well-managed engagement commonly includes the following work:

  • Understand board governance, management responsibilities, banking, collections, purchasing, and financial-close controls
  • Confirm cash and investments and reconcile material accounts to independent records
  • Test assessment billings, cash receipts, delinquency balances, and selected owner accounts
  • Test selected expenditures to invoices, approvals, contracts, and evidence of association purpose
  • Evaluate reserve activity, special assessments, commitments, contingencies, and subsequent events
  • Communicate audit adjustments, control observations, and open items to management and the board

What the audit does and does not provide

A financial statement audit is designed to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud, and to support the auditor’s opinion. Reasonable assurance is a high level of assurance, but it is not absolute assurance and an audit is not a guarantee that every error, control deficiency, improper payment, or instance of fraud will be found.

An audit also does not replace management’s responsibilities, provide legal advice, determine the value of a business or property unless separately engaged, or predict future results. Findings and recommendations should be evaluated in the context of the engagement’s objective and the organization’s risk tolerance.

A practical timeline

Planning should begin before year-end. During planning, confirm scope, independence, deadlines, material locations, confirmation contacts, specialists, prior findings, and client-prepared schedules. After year-end, management closes the books and delivers reconciled schedules. The CPA performs fieldwork, communicates open items, evaluates adjustments and disclosures, obtains representations, and issues the report after all required evidence and approvals are complete.

Calendar time depends on readiness and responsiveness as much as auditor hours. Missing reconciliations, changing trial balances, incomplete contracts, slow third-party confirmations, and late legal or governance information are common causes of delay.

Why work with Dohan CPA

Dohan CPA brings the perspective of a full-service CPA firm serving South Florida businesses, organizations, owners, and high-value individuals. The objective is a technically sound engagement with direct communication, practical request lists, visible responsibility, and attention to the decisions the financial statements must support.

A proposed engagement should be finalized only after Dohan CPA confirms that the service is within the firm’s current capabilities, independence requirements, licensing, staffing, and quality-management procedures.

Frequently asked questions

Does every Florida HOA need an annual audit?

No. The answer depends on whether the organization is an HOA or condominium association, its revenue, its governing documents, and any lawful election to obtain a lower or higher level of service. The board should confirm the requirement for the specific fiscal year before engaging the CPA.

What is the difference between an audit, review, and compilation?

An audit provides reasonable assurance and includes risk assessment, testing, and other procedures. A review provides limited assurance, principally through inquiry and analytical procedures. A compilation provides no assurance and presents financial information in financial statement form.

Will the audit detect every improper payment or fraud?

No audit guarantees detection of every error or fraud. The auditor designs procedures to obtain reasonable, not absolute, assurance that the financial statements are free of material misstatement. Strong board oversight and internal controls remain essential.

How should reserves be prepared for audit?

Reconcile each reserve bank or investment account and prepare a rollforward by reserve category showing beginning balance, additions, expenditures, transfers, and ending balance. Tie the schedule to the general ledger and retain invoices and approvals for major uses.

Who should coordinate the audit?

A management representative should own the request list, while the treasurer or designated board member should monitor progress, resolve governance questions, and participate in required communications.

When should planning begin?

Begin before year-end by confirming the reporting requirement, auditor, timetable, bank confirmations, legal contacts, inventory of major projects, and responsibility for closing the books.

Authoritative sources

General educational information only. This page is not accounting, auditing, tax, investment, or legal advice and does not create a CPA-client relationship. Requirements and standards can change and depend on specific facts and agreements.

HOA Audits: Independent Assurance for Better Decisions | DOHAN CPA