Auditing HOA Financials

Although the act presently applies only to publicly held companies, the Act directs state regulators to make independent determinations as to whether the Acts requirements should be applied to certain other non-public entities. The Act has produced shock waves through the nonprofit sector, and many organizations are altering the way they operate. Until a nonprofit specific law is on the books, each organization with the help of its board will need to decide if it wants to comply with at least the spirit of Sarbanes-Oxley. Provisions of the Act which you may consider as a basis for establishing “best practices” are as follows:

-Document retention policies (in response to document destruction and obstruction of justice concerns)
-Adoption of a code of ethics by senior management or conflict of interest statements and monitoring and enforcing such policies
-Establishment of an independent audit committee to oversee the audit function
-Certification of the financial statements by the CEO and CFO
-Report on management assessment of effectiveness of internal controls

Talk to your CPA/auditor regarding this to see if your state has extended any portions of it to non-profits.

Joe

Thank you so much, Joe.