What it is
A homeowners or condominium association has few transaction types, so the audit concentrates on three things: whether assessment revenue and receivables are complete and collectible, whether the operating and replacement funds are kept apart, and whether the information on future major repairs and replacements is supported.
The checklist also covers cash held by a management company, one of the common weak points in these engagements. Accounting and disclosure points are tied to ASC 972.
When to use it
- Planning an audit, review or compilation for a community association.
- When a management company holds the association’s cash and records.
- When the reserve study is the basis for the disclosure on future repairs.
What’s inside
- Governing document, management contract and minutes review
- Assessment revenue, special assessments, delinquency and allowance
- Operating and replacement fund rollforwards and interfund loans
- Reserve study evaluation and supplementary information
- Insurance, taxes and cash controls
Standard cited
This template follows ASC 972 / AU-C 330. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
Does an HOA have to follow its reserve study?
That depends on the governing documents and state law. For the financial statements, the question is what is disclosed: the study’s estimates, the funds accumulated and, where the association is not funding to the plan, the possible effect such as a special assessment or borrowing.
Who owns the common property?
It varies by entity type and governing documents. Whether it is recorded on the association’s balance sheet depends on ownership and ASC 972 guidance, so read the declaration and apply ASC 972 to the facts before deciding.
Is the reserve study management’s specialist?
If management relies on an outside preparer for the estimates in the disclosure, evaluate the preparer’s competence, objectivity and the reasonableness of the data and assumptions, as AU-C 500 and AU-C 540 require.
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Last updated 11/05/2026. All free templates.