A Certified Public Accountant (CPA) is an accountant who has met the requirements of California state law and has been issued a license to practice public accounting by the California Board of Accountancy. CPAs audit financial statements of both publicly and privately held companies, including homeowner associations. To verify a CPA's license, check online with the Board of Accountancy.
Financial Services. CPAs may provide financial services to a community association within the scope of his or her license in addition to the preparation of reviewed and audited financial statements and the preparation of the community association's tax returns. (Bus. & Prof. § 11501(b).)
Peer Review. Starting July 1, 2011, California CPAs are subject to mandatory review of their auditing and accounting practices. The peer review report is then available to clients who request it. For more information about CPA peer reviews, see California's Board of Accountancy website. In addition, see Replacing SAS 70 in the August 2010 edition of the Journal of Accountancy.
Recommendation: Boards should use CPAs who specialize in community associations. They are more aware of the unique issues affecting associations, such as tax considerations, the interplay between operations and reserves, proper internal controls, financial statement preparation, etc.
FASB. The Financial Accounting Standards Board (FASB) is an organization that develops concepts and standards for financial accounting and reporting for organizations and businesses; these standards are recognized as authoritative by the Securities Exchange Commission and the American Institute of Certified Public Accountants.
GAAP. Generally Accepted Accounting Principles (GAAP) is a widely accepted set of rules, conventions, standards, and procedures for reporting financial information which are established and administered by the AICPA and FASB.
GAAS. Generally accepted auditing standards established by the AICPA.
AICPA. American Institute of Certified Public Accountants.
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