Audits, Reviews and Compilations: Which Service is Right for Your Community?
Requirements per Florida Statutes
Annual Revenue
Exceeds $500,000
Audit
Required
Annual Revenue
Exceeds $300,000
Review
Required
Annual Revenue
Exceeds $150,000
Compilation
Required
Audit, Review and Compilation Comparison
| Audit | Review | Compilation | |
|---|---|---|---|
| Assurance Level | Highest | Moderate | None |
| Required When Florida Revenue Exceeds | $500,000 | $300,000 | $150,000 |
| Report Includes Set of Financials | Yes | Yes | Yes |
| Requires CPA to Perform | Yes | Yes | Yes |
| Inquiry and Analytical Procedures | Yes | Yes | No |
| Fraud Testing | Yes | No | No |
| Understanding of Internal Controls | Yes | No | No |
| Risk Assessment Procedures | Yes | No | No |
| Verification and Substantiation Procedures | Yes | No | No |
Common Situations Where Associations
Will Elect an Audit over review or compilation
- Required by Florida state statutes (annual revenue exceeds $500,000)
- Change in management company
- Significant board turnover
- Association holds a significant amount of investments
- Association has insurance claim activity during the year
- Association is seeking loan approval
- Association is considering a special assessment
- Association has significant replacement expenditures
- Replacement fund is underfunded
- Deficit in the operating fund