Auditing Standards for condos and coops are evolving toward a focus on the Auditor communicating more with the client. This may be somewhat more difficult with not – for – profit volunteer Boards as they tend to outsource the basic accounting work and the relationship with the Auditor to a management company. Here are some of the potential concepts that we report to our clients.
While evaluation of internal controls is not part of a Financial Statement audit, gaining an understanding of your controls can allow auditors to identify significant deficiencies or material weaknesses. The most common concern, is that the auditors involvement in the conversion of the Corporation’s internal financial information (which is prepared on a cash or modified accrual basis) to the full accrual basis of accounting, including preparation of the financial statements and related footnote disclosures, constitutes a significant deficiency in internal control over financial reporting. This issue arises in the audits of many smaller entities which outsource the year end closing function. Any concern on our part tends to be alleviated with management possessing the skill and competency to prevent, detect and correct potential misstatements.
Czarnowski & Beer provides comments and recommendations that are not just required but are intended to improve internal controls and/or may result in other operating efficiencies. This helpful information allows management and the Board to enhance operations and minimize risk. Comments and recommendations tend to cover broad aspects of your operations.