Common Interest Realty Associations Industry Developments – Audit Risk Alert

This Audit Risk Alert is intended to provide auditors of financial statements of Common Interest Realty Associations with an overview of recent economic, industry, technical, regulatory, and professional developments that may affect the audits and other engagements they perform. This alert can also be used by an entity's internal management to address areas of audit concern. This alert is an important tool in helping you identify the significant risks that may result in the material misstatement of financial statements. Moreover, this alert includes information about emerging practice issues and current accounting, auditing, and legislative developments. In addition to information on new technical developments, you will also find information on the following industry conditions and existing engagement issues that are becoming increasingly important to the audit as economic conditions continue to deteriorate:

• Rising construction and energy costs
• Delinquent assessments and bad debts
• Required supplementary information on future major repairs and replacements
• Concentration of revenue
• Uninsured and under-insured risks
• Pending litigation

You will also find information on emerging issues such as:

• Convergence with International Financial Reporting Standards
• The FASB Codification Project
• The ASB's Clarity Project including convergence with international standards
• The ARSC's Reliability Framework Project

This publication is an other auditing publication as defined in AU section 150. Other auditing publications have no authoritative status; however, they may help the auditor understand and apply the Statements on Auditing Standards. This publication is also an other compilation and review publication as defined in AR section 50. Other compilation and review publications have no authoritative status; however, they may help the accountant understand and apply the Statements on Standards for Accounting and Review Services.

The auditing and compilation and review guidance in this document has been reviewed by the AICPA Audit and Attest Standards staff and published by the AICPA and is presumed to be appropriate. This document has not been approved, disapproved, or otherwise acted on by a senior technical committee of the AICPA.