Audit & Attest Services

HOA Financial Reviews — Davis-Stirling §5305 — California CPA

California's Davis-Stirling Common Interest Development Act (§5305) requires HOAs with gross income above $75,000 to obtain an annual financial review by a licensed CPA. PacificWestTax provides independent HOA reviews and audits for community associations, HOA boards, and property management companies throughout Southern California.

Discuss Your HOA Engagement (951) 216-3121

Under California Corporations Code §5305, common interest developments with gross income exceeding $75,000 annually must have their financial statements reviewed by a licensed CPA each year. This is not optional and it is not satisfied by an internal bookkeeping review or a CPA who also manages the association's books. The reviewer must be independent — meaning the same firm cannot both maintain the books and issue the review report. PacificWestTax provides independent HOA financial reviews and audits for associations across Southern California, accepting engagements only where full independence can be maintained.

What Is Included

HOA Financial Review — What We Cover

Annual Financial Review (§5305)

A CPA-issued review of your HOA's financial statements — balance sheet, income statement, and reserve fund activity — performed in accordance with professional standards and satisfying the California Davis-Stirling requirement for associations with gross income over $75,000.

HOA Financial Audit

For associations that require a higher level of assurance — due to lender requirements, board policy, or member vote — we perform a full independent audit of the association's financial statements in accordance with GAAS standards.

Review vs. Audit Guidance

We help the board determine which level of engagement is required. A review satisfies §5305 for most associations. An audit provides higher assurance and is required by some lenders and governing documents. We explain the difference clearly before any engagement begins.

Reserve Fund Analysis

Evaluation of reserve fund disclosures and the consistency between reserve fund activity reported in your financial statements and the reserve study your association relies on for long-term planning.

Independence Maintained

We do not provide bookkeeping, accounting, or financial management services to HOA review clients. Full independence is maintained on every engagement — the same standard required by professional CPA licensing and Davis-Stirling compliance.

Property Manager Coordination

We work directly with your property management company to obtain the financial records needed for the engagement. Most engagements require minimal time from board members once the initial scoping conversation is complete.

Who We Work With

HOA Reviews — Who This Is For

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HOA BoardsNeeding an independent CPA review to satisfy the California §5305 annual requirement and provide financial transparency to members

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Property Management CompaniesCoordinating CPA reviews for multiple associations in their portfolio and needing a reliable, independent CPA relationship

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Associations Requiring an AuditWhose CC&Rs, lender requirements, or member vote requires a full audit rather than the statutory review level

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Associations Switching CPAsWhose prior CPA retired, merged, or is no longer independent — and who need a new engagement for the current fiscal year

Common Questions

HOA Review FAQ

A review is a limited-assurance engagement. The CPA applies analytical procedures and makes inquiries of management, then issues a report stating that nothing came to their attention indicating the financial statements are materially misstated. An audit provides the highest level of assurance — the CPA tests transactions, confirms account balances with third parties, and issues an opinion on whether the financial statements are fairly presented. California §5305 requires a review for most associations. Some governing documents or lenders require a full audit. We help you determine which applies to your association before any engagement begins.

California Corporations Code §5305 requires a review of financial statements for any common interest development with annual gross income exceeding $75,000. The review must be prepared by a licensed CPA and distributed to all members within 120 days after the close of the fiscal year. Failure to comply can expose the board to member complaints and liability. Check your CC&Rs — some associations have additional requirements beyond the statutory minimum.

No. Independence is required. A CPA who also prepares or maintains the association's financial records cannot perform the review — the same professional standards that apply to corporate audits require the reviewer to be independent of the bookkeeping function. If your current CPA or accounting firm manages the HOA's books, they are not eligible to issue the review report. A different, independent CPA must be engaged.

Most HOA reviews are completed within three to four weeks from the date we receive complete financial records. The process begins with a scoping conversation, followed by document collection coordinated with your property manager, fieldwork and analysis, and delivery of the final review report. We target delivery well in advance of your 120-day distribution deadline.

Minimal involvement is required from board members once the engagement is confirmed. We work primarily with your property management company to obtain financial records. We may request a brief call with the board treasurer or president to discuss specific items. The final review report is delivered directly to the board for distribution to members.

HOA Boards and Property Managers

Independent HOA Reviews for California Associations

Start with a scoping conversation. We confirm whether an independent engagement is the right fit before either party commits to anything.

Discuss Your HOA Engagement (951) 216-3121