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Auditor Retiring

Started by NpS • 9 replies • 465 views

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NpS (Pennsylvania)
Posts: 4,216
Posted:
Our auditor is retiring. We've reached out to around 5 auditors but haven't been able to find anyone willing to take us on as a new client. This is surprising to me because in the past, our audits were clean and our books were straightforward.

Here's some of the feedback we got. Wondering if anyone can shed some light on what's going on.

1. A couple of firms said that the auditing rules got a lot more involved in the last year or two.

2. One firm said that they won't consider any HOAs that are self managed.

3. Some said that internal risk assessments are getting so involved that audits are no longer worth doing.

4. Market prices are about double what they were a few years ago.

Our bookkeepers are located in Bucks County PA. Would like an auditor within that general geography. If you know of anyone who covers that area, would be interested in a recommendation. Thanks.
Sikubali jukumu. Read all posts at your own risk.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Didn't your CPA provide you with a name?
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By TimB4 on 10/29/2019 12:54 AM
Didn't your CPA provide you with a name?

The ones he recommended were among the 5 we spoke to.
Sikubali jukumu. Read all posts at your own risk.
TimB4 (Tennessee)
Posts: 21,059
Posted:
NP,

Our last few audits were done via email and telephone calls.
Expecting that you can digitize all the documents, you might not need someone local.
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By TimB4 on 10/29/2019 11:45 AM
NP,

Our last few audits were done via email and telephone calls.
Expecting that you can digitize all the documents, you might not need someone local.

Maybe that's the way to go Tim. Thanks.

Have the auditors you used said anything about additional effort needed to fulfill new internal risk assessment requirements or significant cost increases?
Sikubali jukumu. Read all posts at your own risk.
SheliaH (Indiana)
Posts: 6,964
Posted:
Perhaps your association attorney can make a referral. It may be your state law has changed so that the work is more intense and therefore you'll need to pay more money, so brace yourself for that.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By NpS on 10/29/2019 12:50 PM
Posted By TimB4 on 10/29/2019 11:45 AM
NP,

Our last few audits were done via email and telephone calls.
Expecting that you can digitize all the documents, you might not need someone local.


Maybe that's the way to go Tim. Thanks.

Have the auditors you used said anything about additional effort needed to fulfill new internal risk assessment requirements or significant cost increases?

Nope
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By SheliaH on 10/29/2019 2:57 PM
Perhaps your association attorney can make a referral. It may be your state law has changed so that the work is more intense and therefore you'll need to pay more money, so brace yourself for that.

Thanks Sheila.
Sikubali jukumu. Read all posts at your own risk.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Along the lines of the OP's post. We needed some retention pond construction done. One of the companies we contacted said sorry, but they will not do business with HOA's. I asked why? Was told due to BOD changes they often changed their mind on the projects, and sometimes after the project was started. Too many people to answer to. HOA's are always crying poor mouth and want the work done on the cheap.

Candidly, I admired the guy's answer.
NpS (Pennsylvania)
Posts: 4,216
Posted:
Spoke to the owner of our bookkeeping company today. Used to be our Auditor when someone else was managing our books.

He said that:

- Ever since Enron, the Audit requirements have grown dramatically, sometimes with significant changes every year. Tough for smaller firms to keep up with.

- There is no special consideration for our industry. Even though the risk of fraud in an HOA is usually limited to cash, receivables, and maybe contract issues, all the requirements of an Enron are imposed on folks like us. This is especially burdensome because unlike one of those corporate behemoths, our income, expenses, and activities don't change much from year to year.

- Because of the additional requirements for Audits, cost will be more than twice what we paid in the past.

- He passed his Auditing peer review without issue. One of the big 4 accounting firms didn't. But no one is going to take action against them. So once again, the rules affect the small fish, not the big guys.

I started looking to see how we could keep our costs down. Came across this article about changes to Non-Profit Corporation Laws that went into effect in 2018. Seems that the threshold for Audits, Reviews, and Compilation requirements were raised.

Since we bring in less than $250k in income, we could probably get away with a Compilation. But I don't want to give up the added security of an Audit. Thinking about alternating - Audit one year, Compilation the next. Would bring our costs back down to a reasonable level.

https://www.rklcpa.com/nonprofit-update-pa-raises-audit-requirement-threshold/
Sikubali jukumu. Read all posts at your own risk.

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