Your Guide to Easy Condo Audits

Condos can seem layered with complexities especially when it comes to managing the finances. That’s why we’re here—not just as your condo management experts but as your friendly guides. Let’s break down the essentials of condo audits, making it as straightforward as possible.

While the Condominium Property Act doesn't explicitly require condo corporations to complete an annual financial audit, it does require that all financial statements adhere to Generally Accepted Accounting Principles (GAAP). This means having an audit or review engagement completed after each fiscal year. Unfortunately, a compilation engagement (also known as a notice-to-reader) does not meet GAAP requirements. 

Here is a typical timeline to complete a condo audit:

• Generally, the audit process begins 45-60 days after the fiscal year ends. This delay allows all invoices from the fiscal year to be accrued and recorded. This is because the only accounting method allowed by GAAP is accrual. Accrual accounting means that  revenue and expenses are recognized in the year where they occur (rather than when cash changes hands). 

• Once the auditor has received the financial information from your bookkeeper, the audit will take around 45-60 days to complete. 

• Once the draft audit is ready around 90-120 days after the fiscal year ends, the board reviews and approves the audit by board resolution before the auditor will generate the final version of the audit. 

• Changes made by the board before the final version of the audit is issued are usually minor, such as tweaks to the wording of notes or reorganizing how expenses are listed under operating or reserve funds.

Some condos choose to have an audit completed, while others prefer a review engagement. Both audits and reviews will meet GAAP standards. The choice depends on what level of assurance your board wants and the wording of your bylaws. Some condo auditors charge the same price for an audit as they do for a review engagement, while other auditors will charge less for a review engagement. 

Choosing Key Condo means opting for a partner who not only understands the legal and financial landscapes but also cares deeply about your community’s well-being. We pride ourselves on being approachable and consultative, helping your board make informed decisions that align with your condo’s unique needs. With Key Condo by your side, you gain a partner who brings clarity and simplicity to complex processes, ensuring that you’re always in compliance and well-prepared for your AGM.