Community Associations

Cukierski & Associates performs audits, reviews, compilations, tax preparations, financial statement preparations, and other agreed-upon procedures for over 1,200 community associations. With multiple team members at our firm who sit on boards of directors in their own associations, we are well versed in the dynamics and intricacies of community associations.

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We understand the complexities of community association accounting and can assist associations with the burdensome tasks of bookkeeping and financial statement presentation. Please contact us so we can customize a plan to assist your association.


Community associations are the only entities under the Internal Revenue Code that can file two different tax returns (Form 1120 or Form 1120-H). The entity can change from one filing method to another each year, under two different sets of tax laws at two different tax rates.

Audits, Reviews, and Compilations

There are several reasons community associations decide to have an audit, review, or compilation performed on their financial statements. Things to consider include:

  • Some declarations and bylaws mandate that the association’s financial statements be audited, reviewed, or compiled by an independent firm
  • Financial institutions and lenders sometimes require these types of reports as part of the loan covenants
  • Some associations are mandated under state law to provide financial statements in accordance with Generally Accepted Accounting Principles (GAAP)
  • These procedures provide a level of assurance on the figures reported on the financial statements


The highest level of assurance a CPA can perform is an audit. The objective of an audit is to provide “reasonable assurance” that the financial statements prepared by an entity are free of material misstatements. This means that the statements are free of any error or omission that may impact the economic decisions of someone relying on those statements.

Because an auditor does not test 100% of the transactions of an entity, all audits are based on a risk assessment.

It is the auditor’s job to:

  • Obtain an understanding of the entity and its environment, including its internal control, at a minimum, to accurately assess the risks of material misstatement and provide a basis for designing and implementing responses to the assessed risks
  • Design and perform audit procedures to obtain sufficient audit evidence in response to the assessed risks of material misstatement
  • Form an opinion on the financial statements based on conclusions drawn from the audit evidence obtained
  • Provide recommendations to the association for best practices on financial statement reporting
  • Provide a report of findings if significant deficiencies of internal controls are identified
  • Maintain independence from the association

Other common audit procedures include but are not limited to:

  • Testing and reconciling fund balances
  • Testing and reconciling assessments and interest income
  • Analyzing other revenue and expenses
  • Utilizing com or using alternative procedures to confirm cash, investment, and loan balances
  • Testing or sampling of expenses
  • Test management’s assertion that expenses are classified to the correct fund


A review is a step down from the audit engagement. While an audit will provide the user of the financial statements “reasonable assurance,” a review provides “limited assurance” that the financial statements are free of material misstatements.

A review does not require the CPA to gain an understanding of the association’s internal controls or assess fraud risk. However, the CPA is required to maintain its independence and understand the industry, including the accounting principles and practices generally used in the industry.

The CPA performs analytical procedures and utilizes inquiry and other procedures to provide “limited assurance” on the financial statements. The CPA does not test records, confirm balances, examine documents, or perform other procedures ordinarily performed in an audit.


A compilation report does not provide any assurance that the financial statements are free of material misstatement. A compilation engagement also does not require that a CPA is independent of the association. However, if the CPA is not independent, they are required to disclose the impairment in the report.

In a compilation engagement, the CPA is not required to verify the accuracy or completeness of the information provided by the association. The firm is also not required to gather any evidence. The firm takes the information provided by the association and utilizes its professional judgment to consider whether the financial statements appear appropriate and are free from obvious material misstatements.


Forensic accounting is used to investigate fraud, embezzlement, and other irregularities hidden in financial transactions. With our Certified Forensic Examiner leading the engagement team, we will discuss the procedures needed to address the association’s concerns. At times our work may be used in legal proceedings.

Forensic services we offer include but are not limited to:

  • Fraud examination in which we review the association’s internal financial documentation and search for any irregularities
  • Financial statement and internal financial recreation
  • Testimony in legal proceedings (if needed)

Other Services

Sometimes associations have other concerns besides year-end financial statement presentation. We discuss these concerns with our clients and utilize different methods and procedures to alleviate those concerns. These agreed-upon procedures are detailed in a report along with the conclusions of those procedures.

Other services we offer include but are not limited to:

  • Election or voting tabulation services
  • Cash-flow analysis
  • Banking solutions
  • Management company recommendations
  • Developer turnover engagements
  • Internal control analysis and recommendations

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