Club Management - September/October 2007 - (Page 29) Feature Impact of New Club Audit Standards Survey Results of club professionals’ audit practices By Tanya Venegas, MBA, MHM T The topic of new auditing standards is a popular one these days amongst businesses. In particular, clubs are being hit hard by increased auditing fees. In 2004, the Auditing Standards Board (ASB) decided to develop new audit standards or revise existing standards to bring U.S. Generally Accepted Auditing Standards (GAAS) closer to the International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB) (Walker, 2007). The first set of new auditing standards, which came into effect in December 2006, pertain to risk assessment and there will be more to follow. In order to gauge the impact of these new standards, a survey was distributed by the HFTP Research Institute to members of both HFTP and the Club Managers Association of America. By teaming up with CMAA on this project, HFTP was able to increase the number of surveys distributed. Respondents were asked to answer a series of questions about their establishment, type of audit and audit cost trends over the last three years. Respondent Profile Respondent Organization. There were 372 responses to the club audit fee survey. As expected, the majority (59 percent) were members of CMAA. CMAA has a larger club membership and wider distribution base than HFTP. Type of Club. Survey participants also were asked to indicate the type of club where they work. The majority of respondents indicated that they work at country club properties (57 percent). Falling into a distant second was golf clubs (19 percent), followed by city clubs (10 percent), yacht clubs (6 percent), tennis/racquet clubs (2 percent), and beach clubs (1 percent). The remaining 5 percent of respondents worked for various other types and combinations of clubs such as athletic clubs, community associations with a golf club component, hotels/resorts with a country club, social clubs, sporting clubs, equestrian clubs and university clubs. Public vs. Private. Respondents provided information on whether their establishment offers public accommodations. An overwhelming 97.6 percent work for private facilities offering services to members only. Six respondents indicated they operate semi-private facilities that include a public resort, public amenities and public banquet facilities. Only three respondents indicated that their establishment provides services to the general public. Annual Revenues. In order to accurately segment the audit data, survey participants also were asked to provide information on their establishment’s annual revenue. Most of the respondents (83 percent) work for clubs with an average annual revenue between $1 million and $10 million. Only 3 percent of clubs earned less than $1 million, and 14 percent averaged greater than $10 million per year. This statistic is very important when segmenting audit data, because there tends to be a correlation between the complexity of an audit with increased income. In other words, the more money SEPTEMBER/OCTOBER 2007 • 29
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