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Writer's pictureCadena Advisors

The External Auditor and its Role in the Successful Operation of the Condominium

Updated: Nov 20, 2023

Undoubtedly, both the Surveillance Committee and the Administration play an essential role in the activities that must be carried out within a Condominium; and if, in addition to this, they have the collaboration of an external auditor that provides them with certainty of the proper functioning of the Condominium, the probability of complying with the established internal and external guidelines, as well as the agreements approved in the ordinary and/or extraordinary condominium owners' meetings, increases significantly.


Condominios

The Condominium regime has taken special relevance in our country, so much so that in our region there has been a strong growth according to figures integrated by INEGI, so having a highly effective tripartite team can contribute to the safety, stability, conservation and proper functioning of the services that must be provided in this type of housing.


Part of the functions that an external auditor performs in this type of non-profit entities is to be an ally for the Vigilance Committee in order to make sure that the Administration complies with the agreements of the Condominium Owners' Assembly, as well as with the duties imposed by the Condominium Owners' Law of the state in question, the articles of incorporation and the internal regulations of the condominium, in addition to all accounting, tax and labor compliance, providing an opinion as to whether the financial statements reasonably show compliance with the Financial Reporting Standards, as well as a report of observations and recommendations that will allow it to implement improvements in the operation of internal control.


The implementation of an external audit in Condominiums can focus on several objectives: internal procedures (audit of internal controls), financial information (audit of financial statements), certain items of the financial statements (limited audit based on the needs of the entity) and even the investigation of a possible diversion of resources or fraud by the Administration (forensic audit), so that the opinion of a third party outside the entity is vital for the proper compliance of the condominium.


Are you a member of the Surveillance Board, condominium owner or new manager in a Condominium and suspect that the provisions set forth in the Condominium Assembly or its bylaws have not been complied with?


Are you uncertain about whether the condominium fees that are periodically paid have been applied to the projects approved by the ordinary or extraordinary assembly of your condominium?



Your Administration does not provide you with an updated account statement showing the fees you have paid or does not allow you access to the Condominium's documentation upon request?



Do you need more information? Contact us and we will be glad to guide you on the type of external audit that best suits your needs.


"In terms of Article 89 of the Federal Tax Code in force, the content of this reproduction, exposition, presentation, program or transmission and/or the documents and/or examples used to present the same, may express positions that do not coincide with the criteria of the Mexican tax or judicial authorities. This reproduction or presentation is not intended to and may not be used by any person for the purpose of avoiding (i) a tax, federal, local or municipal, or (ii) the imposition of tax penalties in the United Mexican States. Consultores Cadena, Barrio y Asociados, S.C. is not responsible for the use or judgment that any user may make or have derived from this reproduction or display."


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