Assignment 2: Discussion—Homeowners Association Financial Statements

A condominium Homeowners Association (HOA) uses the services of one member of the board of directors as the treasurer. The responsibilities of the treasurer include collecting monthly maintenance fees, paying bills, and managing the capital maintenance fund, which supports major exterior repairs and maintenance on the development. By-laws state that, at the end of each fiscal year, the board must issue to all residents a set of financial statements prepared by a certified public accountant (CPA).One year, at the annual meeting, as the financial statements are passed out to members, resident Harvey Pennypacker questions the role the accountant plays in examining the work and records of the treasurer used in the preparation of the financial statements. He questions whether a full annual audit is necessary or perhaps a lower level nonaudit attestation service will do.Assume you are a certified public accountant (CPA) working for the firm Dewey, Wright, and Moore. You have been called in to review the case of the HOA. Research the need for a full audit using the textbook, and the Internet. Respond to the following.The HOA board has asked you to provide an opinion on Pennypacker’s question. Would you recommend a full audit or a nonaudit attestation service? Explain why.Use the textbook readings for this module and one other source to support your answer. Cite the sources.

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