Re: When Is a financial Audit Required or Recommended?
From: Diana Carroll (
Date: Wed, 23 Oct 2019 07:36:50 -0700 (PDT)
How do you all go about finding an auditor?  Does anyone in the New England
area have one to recommend?  Or maybe auditors are from national companies,
if so, which do you use?

How much does an audit cost?  (Roughly...ballpark figure.  I have no idea
if it would be $100 or $1000...)

Mosaic Commons in Berlin, MA

On Tue, Oct 22, 2019 at 9:02 PM S. Kashdan <s_kashdan [at]> wrote:

> Hi all,
> I have not received any answers to my initial questions about financial
> audits. But I did receive some more questions. In the process of
> responding
> to some of them, I found the below checklist that may be of help to some
> other communities:
> When Is a financial Audit Required or Recommended?
> Our firm has identified ten particular circumstances where we strongly
> suggest that an audit be performed. They are as follows:
> 1.  When large amounts of money are received for unusual circumstances. Two
> examples are construction defect settlements or large insurance proceeds.
> 2.  When there is unusual replacement fund/reserve activity. This may be
> when there are large reserve projects, when the Association is severely
> underfunded, or if the Association is not meeting budgeted expectations.
> 3.  When there is a change in management companies. (This is not an
> absolute, but it seems to be a good time to ensure that the transition
> between the management companies results in the correct balances being
> carried over and properly set up on the new books.)
> 4.  When there is little or no internal control. An example of this would
> be
> when the Association is self-managed and the treasurer writes the checks,
> signs the checks and prepares the bank reconciliations.
> 5.  When the board has not been receiving financial statements on at least
> a
> quarterly basis. This is especially true when there is no standard
> accounting system in place.
> 6.  When there is suspected fraud or embezzlement. (Please tell your CPA of
> your suspicions before the engagement begins!)
> 7.  When there is a lot of political infighting among the board members or
> there is a transition from one board to another which is not pleasant, such
> as the case of a recall.
> 8.  When the developer turns over control of the Association to the
> homeowners.(Even when not required, e.g. homeowners associations)
> 9.  When the Association is having financial difficulties. It may seem
> strange that the Association should spend more money when it is losing
> money. But, it may be that the Association needs a professional to spend
> some extra time on the books to ensure that everything is being properly
> recorded. When an Association is in financial trouble is when they need
> help
> the most.
> 10.  Associations with over $1,000,000 in annual assessments.
> Cohousingly,
> Sylvie
> Sylvie Kashdan
> Community Outreach Liaison
> Jackson Place Cohousing
> 800 Hiawatha Place South
> Seattle, WA 98144
> info [at]
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