Owners Corporation Audits

You are likely to be a member of an Owners Corporation (OC) if you own a flat, apartment or unit. Since an owners corporation is generally managed by a third party manager who holds a real estate agent’s license and who uses a trust account for the owner’s corporation’s bank accounts, there may be a need for an audit of these trust accounts each year.

The owner’s corporation manager acts on behalf of the committee of management which comprises of lot owners or proxies of lot owners. The committee makes decisions on various financial matters pertaining to the management of the common property and provides directions to the owner’s corporation manager to act on via minutes of the meetings. The OC Manager then acts on the committee’s guidelines and performs the tasks assigned.

The management of the OC is governed by a contract of the appointment of the manager and services are provided by the various contractors who in turn hold contracts with the OC for services such as cleaning and maintenance of the common property.

Sometimes mixed use buildings may have multiple OC’s, so the need to audit multiple trust accounts arises. Cost allocations and record keeping becomes the major focus of such an audit into the financial affairs of the OC Manager’s maintenance of the trust accounts on behalf of the lot owners as well as compliance with the OC Act.

The Owners Corporations Act came into force in 2006. This Act sets out the duties and power of the Owners Corporation. As a member, you have a legal and financial responsibility to the Owners Corporation.

The Owners Corporation’s responsibilities include managing the common property, repairs and maintenance. They also have to prepare the financial statements and keep proper financial records.

Once the Owners Corporation Act came into force in 2006, it took effect on 31st Dec 2007, which meant that all body corporate organizations became Owner Corporations.

Prescribed Owners Corporations have a mandatory requirement to audit their financial accounts every year. Prescribed OC’s are those that have more than 100 lots which includes; apartments, storage, parking lots, retail as well as commercial offices.

Even if your Owners Corporation is not a prescribed Owners Corporation, an audit of the financial statements provides peace of mind & assurance to the owners and managers of the owners corporation on the financial management of the corporation. While not being a mandatory audit, the committee may choose to have a voluntary audit conducted to ensure confidence in the management of the financial matters of the OC.

The benefits of an owner’s corporation audit are as follows:

  • Obtaining an independent, expert opinion regarding the truthfulness and fairness of the financial statements
  • Detection of any errors
  • Ensuring compliance with accounting principles & standards
  • Detection & prevention of any fraudulent activity

In order to complete an effective and efficient audit, the following may be required:

  • General Ledger or access to accounting software used
  • Income and Expenditure Statement
  • Balance Sheet
  • Copy of the prior year’s audit report
  • Trial Balance
  • Receipts/Invoices for revenue earned during the financial year being audited
  • A copy of the plan of subdivision
  • Members Register
  • Invoices paid during the financial year
  • Bank statements during the course of the financial year being audited
  • Insurance statement for the property being audited
  • Minutes of all meetings held during the financial year being audited
  • Approved budgets for the financial year being audited
  • Contract of appointment of the manage
  • Copy of Business Activity Statements (if applicable)

Please complete the below form, to request a quote for the audit of your OC:



Protection of owner

The audit is an opportunity to ensure that those entrusted with the smooth operation of the Owners Corporation are delivering that service; specifically, it provides an independent expert review of the annual financial transactions of the Owners Corporation managed by the appointed manager.

The audit report will document an opinion by the auditor in regards to the overall compliance and financial aspects of the running of the OC(s). The Owner’s corporation audit, therefore, is a vital tool in the efficient running of the OC, so we strongly believe that regardless of the size of the OC, undertaking an audit each year is essential and beneficial to the OC.

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