In today's market, the best way to give every owner confidence is an independent look at the strata's finances. A strata review engagement is an independent CPA check of a strata corporation’s financial statements, with a written report to the council and owners. It is not required by law, but owners can vote to have one done, and it can answer the question “can we trust the numbers?” HJ Wu & Company Inc. (CPA) provides review engagements and compilations for strata corporations in Vancouver and across BC.
- Review engagements and compilations of strata financial statements, with a report to the council and owners
- Help working out whether owners want a review or a compilation
- A clear answer for owners after a manager change, a large levy or a big repair bill
Peace of mind for every owner
Owning in a strata is a big financial commitment, and owners are trusting a council and a manager with their money. In today's market, with insurance costs, repair bills and special levies in the news, owners, buyers and lenders are paying closer attention to how stratas are run. An independent review is a simple way to show that the strata's finances are in good order, and to find out early if they are not.
- Objective. A CPA who is independent of the council and the manager looks at the numbers, so the answer does not depend on who you ask.
- Good for everyone. Owners get confidence, councils get a clear record of good stewardship, and managers get a clean handover.
- Helps at sale time. Buyers and their lenders often look at a strata's finances closely, and a reviewed statement can help them feel comfortable.
- Catches problems early. Errors, gaps in documentation or weak controls are much cheaper to fix when they are found early.
- Protects the council. Council members are volunteers. A review shows they have been open with owners.
For many stratas, an annual or every-few-years review is the simplest way to keep everyone confident that the strata is in good standing, and it usually costs far less than an audit.
When a strata might want one
The Strata Property Act does not require a strata corporation to have its financial statements audited or reviewed. But owners are entitled to ask for one, and in many stratas it is a good idea. If the owners vote for it, the council commissions it, and the CPA reports to the strata corporation, not to any one owner or council member.
- The strata has changed managers, or the council has turned over.
- There has been a large special levy, insurance increase or major repair project.
- Owners have questions about the numbers and want an independent answer.
- A lender, buyer or your bylaws are asking for assurance.
- The council wants a clean, trusted starting point for the next year.
Review, audit or compilation: which one?
| Engagement | What the accountant does | Assurance |
|---|---|---|
| Audit | Tests transactions, confirms balances, gives an opinion on the statements | Highest |
| Review engagement | Asks questions, analyzes the numbers, reports whether anything suggests the statements are not fairly presented | Moderate |
| Compilation | Assembles the statements from the records | None |
The firm provides review engagements and compilations for strata corporations, and the owner, Amy Wu, has worked on audit and review engagements for many years. The firm no longer performs audits. If your owners decide they want a full audit, you will need another firm, but for many stratas a review gives the independent check they are looking for at a lower cost. Not sure which one your strata needs? Just ask.
How it works
- A short call. Tell the firm about your strata, why owners want a review, and when the next general meeting is.
- A quote. The firm looks at your latest financial statements and gives you a fee and a timeline.
- The vote. Owners approve it at a general meeting, following what your bylaws say about votes and amounts.
- The review. The firm asks for the records it needs and works with your strata manager or bookkeeper.
- The report. The firm gives the council the financial statements with its review report.
Common questions
Does a BC strata have to have its financial statements audited or reviewed?
No. The Strata Property Act requires the strata corporation to give owners a budget and a financial statement before each annual general meeting, but it does not require those statements to be audited or reviewed. A strata can still choose to have one done, and some bylaws or lenders ask for it. The BC government's financial best practices page for stratas recommends considering an audit or an independent financial review, such as a review engagement.
Can the owners vote to have an audit or a review done?
Yes. Owners can ask for it at a general meeting, and it is normally put forward as a resolution. The vote needed, and any spending limits or approval amounts, depend on your strata's bylaws and on how the cost would be paid. Please read your bylaws first to see what they say about votes and amounts. If anything is unclear, ask your strata manager or a strata lawyer before the meeting.
What is the difference between an audit, a review and a compilation?
An audit gives the highest level of assurance. The accountant tests transactions, confirms balances and gives an opinion on whether the statements are fairly presented. A review engagement gives a lower level of assurance. The accountant asks questions and analyzes the numbers, and reports whether anything has come to their attention that suggests the statements are not fairly presented. A compilation gives no assurance at all: the accountant assembles the statements from the records. For many stratas, a review is a sensible middle step, because it costs less than an audit and still means a CPA has looked at the numbers independently.
Why would owners ask for a review?
Usually for confidence. Common reasons are a change of strata manager, a large special levy, a large insurance or repair bill, questions about where money went, a new council that wants a clean starting point, or owners who simply want an independent set of eyes on the books.
Who can do the review?
A review of financial statements is performed by a licensed CPA firm. The accountant needs to be independent, so it is usually not the same person or company that keeps the strata's books. Ask any firm about its experience with strata corporations and about its independence before you hire it.
How much does it cost and how long does it take?
It depends on the size of the strata, the quality of the records and the level of assurance. The firm will give you a quote after a short conversation and a look at your most recent financial statements. A review costs less than an audit.
Free strata tools for owners and councils
We built eight free tools to make strata money easier to understand. Nothing is saved. They work well alongside a financial review.
- Special Levy Calculator: each unit's share by unit entitlement, and the monthly cost if the strata borrows.
- Earthquake Deductible Calculator: what “10% (minimum $100,000)” on your insurance means in dollars.
- Insurance Lines Explained: every line of a strata insurance summary, in plain and technical language.
- Strata Fee Calculator: your monthly fee, and how an insurance increase flows into it.
- Reserve Fund Planner: when the reserve fund could run short, and what to contribute.
- Deductibles and Your Own Policy: your share of each deductible, and the gap with your own condo insurance.
- Vote Counter: whether a majority, 3/4, 80% or unanimous vote passes, with quorum.
- Insurance Deductible Strategy: whether a higher deductible is worth the premium saving.
Official sources
- Strata Property Act (BC Laws)
- Financial best practices for stratas (Province of BC)
- Types of strata voting (Province of BC)
Voting rules and spending limits vary. Please check your strata's bylaws for the votes and amounts that apply. This page is general information, not legal advice.
Prepared by HJ Wu & Company Inc. (CPA). General information only, not personal advice. How the guides are written and reviewed.
Talk to HJ Wu & Company Inc.
Phone: 604-636-1862
Email: inquiry@hjwucpa.com
512 - 938 Howe Street, Vancouver