Home Owners Associations – Audit Considerations for Managers and Partners

Home owners associations or HOAs, are high risk engagements for auditors, as very little is known about this industry. This has the downside that auditors are not able to plan engagements in a well thought-through manner, leaving them open to audit risk.

The International Standard on Auditing or ISAs, are to be uniquely applied in the special circumstances of an HOA, considering their non-profit-motive and the careful budgeting and spending process usually followed by HOAs.

Our goal is to address the pre-engagement, planning and finalisation phases of a home owners association audit engagement and highlight what’s important for audit managers and partners to ensure audit quality.

Home Owners Associations – Audit Practical Implementation for Trainees

HOAs are audited by following the requirements of the International Standard on Auditing ISAs however, because an HOA is not a profit-oriented entity, an audit trainee will need to be aware of how this unique business model skews their focus when attempting to successfully carry out the fieldwork phase of an HOA audit.

As HOAs are becoming an increasingly popular way to gate-keep residential areas, it brings with it increasing need for auditor awareness when considering the unique circumstances of auditing such an association’s financial statements.