Florida Community Association Manager Practice Exam

What financial report must be compiled if an association's total annual revenue is between $150,000 and $300,000?

1. Audit

2. Compilation

3. Review

4. Cash Receipts

The correct answer is: Compilation

When an association's total annual revenue falls between $150,000 and $300,000, it is required to have a compilation performed. A compilation provides a basic level of financial reporting, where a certified public accountant (CPA) prepares financial statements based on information provided by the association, without giving any assurance or conducting any verification of the data. This is designed to give the association’s board and members an overview of its financial status in a cost-effective manner. The compilation report is particularly important for associations in this revenue range, as required by Florida law, to ensure transparency and accountability in financial reporting. It strikes a balance between sufficient oversight and the associated costs of more in-depth reviews or audits, which are mandated at higher revenue thresholds. Understanding the specific requirements for financial reporting helps associations maintain compliance with state laws and can provide valuable insights into their financial health.