Definition
An independent CPA's examination of an HOA's financial statements, providing the highest level of assurance they're accurate.
A financial audit is an independent examination of the association's financial statements by a CPA, offering the highest level of assurance that they fairly present the HOA's finances. The auditor tests records, confirms balances, and evaluates controls.
Some governing documents or state laws require periodic audits, especially for larger associations. Audits are more thorough (and costly) than a review or compilation, and they can surface control weaknesses or errors the board should address.