FINANCIAL STATEMENT
LEVELS OF ANALYSIS

Audit. The CPA performs an extensive examination of the association's financial records and issues a statement as to their compliance with GAAP. Accountant must be independent. Audits are more expensive than reviews and compilations are discretionary by the board unless called for in the association's CC&Rs or Bylaws.

Review. Required for all associations with gross annual income exceeding $75,000.00. The CPA performs limited inquiries and analytical procedures; but does so in accordance with generally accepted accounting principles. Accountant must be independent.

Compilation. The CPA compiles information provided by the management of the association. The CPA is required to perform very few procedures, takes little responsibility for the financial statement, and gives no assurance as to compliance with generally accepted accounting principles (GAAP). Accountant need not be independent.

Updated by ADAMS KESSLER 8/9/2008