Determine a Property’s Value: 4 Types of Financial Audits

Asset managers must regularly evaluate (audit) each property management firm. An audit is typically held either once each year or every two years. In real estate, the economic value of each property depends directly on the net income that the property produces.
Types of AuditsThe four types of audits management firms are subject to are:
1. Compliance audits
2. Tax audits
3. Utility audits
4. Tenant audits
Compliance AuditsCompliance audits verify whether a firm is complying with policies and procedures. These audits make certain that transactions are documented properly, are on file, and are signed by the proper person in authority. They also ensure that the company adheres to bidding and purchasing protocols and conflict-of-interest (or other) ethical guidelines.
Tax AuditsTax audits are a highly specialized field devoted to reviewing records for tax compliance. Tax audits are conducted by taxing authorities who are direct government employees. Tax auditors typically investigate the classif…
Types of AuditsThe four types of audits management firms are subject to are:
1. Compliance audits
2. Tax audits
3. Utility audits
4. Tenant audits
Compliance AuditsCompliance audits verify whether a firm is complying with policies and procedures. These audits make certain that transactions are documented properly, are on file, and are signed by the proper person in authority. They also ensure that the company adheres to bidding and purchasing protocols and conflict-of-interest (or other) ethical guidelines.
Tax AuditsTax audits are a highly specialized field devoted to reviewing records for tax compliance. Tax audits are conducted by taxing authorities who are direct government employees. Tax auditors typically investigate the classif…