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Owners Association Auditing

Owners association audit is an audit conducted on service charges charged to communities. These charges include an Owners association charge which is the maintenance of commonly used assets between 2 or more units example chillers, boilers, corridors, lifts etc which are more commonly found in buildings, plus a Master community charge where assets which are commonly used by the whole community are maintained eg roads, street lightings etc and provisions made to replace them after a certain period of time eg street lights, tunnels etc.

We have staff with enough experience, talent and capability to handle such an audit to give our clients 100% satisfaction that they are receiving good value for the money they pay.

Empowering the Owner’s Association

Dubai is the center of real estate investments for investors from all around the globe. The city of Dubai continues its strong position in the global investment market having strong positive dynamics, a stable political environment, a perfect modern infrastructure, a good lifestyle as well as a social community that appeals too many. Large amounts of money are being invested all the time in properties which necessitates the development of Owner's Association that is run by elected representatives. This Owner's Association is responsible for addressing any issues or problems that may arise out of managing a gated community.

AASC Philosophy

By ensuring transparency of the Home Owners Association Management accounts, we enhance Homeowners trust in the developer and the building management.

We take pride in enhancing social responsibility and maximizing shareholder’s wealth.

A homeowner’s association financial statement audit consists of 4 phases:planning, risk assessment, fieldwork, and reporting.

Planning

The planning process begins when a client calls an auditor to inquire about having an audit performed for their homeowners’ association. The auditor first needs to establish an understanding with a potential client regarding the services to be performed for each audit engagement.

This understanding includes:

  • The objective of the audit
  • Timing of field work
  • Report deadlines
  • Audit fees

Risk Assessment

Our firm conducts a risk assessment of a homeowners’ association simply to identifying the risks of what can go wrong in preparing the financial statements and the likelihood and significance that something went wrong. During the risk assessment phase, an auditor will ask questions, conduct walk-through of key processes, perform analytical procedures, and test internal controls to get a handle on the audit risks.

Our firm will also need to understand the homeowners’ association operations and review of the HOA’s financial performance.

Fieldwork

The auditor needs access to client records to conduct fieldwork. Although more fieldwork can be done offsite with improvements in technology, this work is usually done on-site so the auditor(s) will need a physical space to work. Fieldwork consists of substantive analytical testing and substantive tests of details. This testing is called “substantive” because it substantiates the client’s assertions and accounting records.

Analytical testing involves identifying relationships between an HOA’s balance sheet and income statement. The most basic form of analytical testing is a variance analysis, where current year’s results are compared to prior year’s results. Test of details involves selecting a sample of transactions to examine supporting documents. For example, a sample of expenses will be selected to examine supporting invoices to make sure the expense was properly authorized and recorded in the correct expense account for the right amount.

Other items that the auditor will examine during fieldwork include:

  • Bank statements, bank reconciliations, and cancelled checks
  • Original invoices expenses
  • Payroll records
  • Copies of signed contracts and leases
  • Loan statements
  • Proof of ownership of any land, buildings, and equipment
  • Possibly look at major inventories, supplies, and capital assets
  • Reasons for fluctuations between your budgeted and actual results
  • Reserve study report

Reporting

A few items are addressed before a final audit report and financial statements are issued.

The “Management Representation Letter” needs to be signed before the final audit report is issued. The Management Letter is where homeowners’ association management and board declare that all disclosures were made and appropriate and without omission of material facts to the financial statements, to the best of their knowledge.

The board of directors will then get a draft financial report for review and approval and a final, signed copy of the audit report and financial statements will be issued to the homeowners’ association.

How does the Owner's Association benefit from AASC’s services?

  • Researching opportunities for better delivery of the owner's association services
  • Meeting the management team for brainstorming sessions.
  • Keeping tabs on vulnerable areas and advising the association to avoid crises.
  • Adding value by delivering quality audit services.
  • Offers critical feedback in order to improve the efficiency and effectiveness of the Owner's Association.

 

READ WHAT SOME OF OUR CLIENTS ARE SAYING ABOUT US:

  • “I bow to all staff at AASC for their understanding, professionalism, competence, patience and tact. They are specialists of high grade with a personal touch and attention to detail.“

    Adnan, Development Institute Director

  • “Truly a great team. Highly motivated, experienced and focused on delivering a great service. No wonder they are one of the most respected providers in UAE.“

    Ghassan, Al Waseet

  • “When selecting our auditing company, we focused on the companys reputation, service quality and level of expertise. For us, AASC have proved to be the right choice”

    Hamdy, Printing Press