Audit and financial review
Also called: Audit; review; compilation
Associations commonly use three levels of outside financial work, all performed by a CPA. A compilation presents the board's numbers in standard financial-statement form with no assurance about accuracy. A review adds analytical procedures and inquiries and gives limited assurance. An audit tests transactions and balances against bank records, invoices, and minutes, and gives an opinion on whether the statements are fairly presented.
Which one is required depends on state law and the governing documents, and the threshold is often tied to annual revenue — Florida, for example, scales the required annual financial report by revenue. Owners can sometimes vote to waive or upgrade the level.
Even where nothing is required, an independent review every year or two is cheap insurance for volunteer treasurers and builds owner trust.