Annual Report 2017-18: Independent Auditors' Report, Combined Financial Statements and Supplementary Information.

CalCPA TREASURER'S REPORT

CalCPA finished the fiscal year with an all-time high of just over 44,000 members. Financially, total assets decreased by $3.7 million this year to a total of $32.1 million. Net assets finished the year at $23.5 million--lower than the prior year due to one-time expenses related to moving to our new headquarters. These included relocation expenses and loss on sublease, in addition to an increase in deprecation.

Despite the membership increase, dues revenues declined slightly by 2 percent from the prior year. This downward revenue trend reflects the conversion of members into our Life membership category and retirement of members, combined with the decrease in CPA candidates seeking CPA licensure. Our Student and Candidate membership categories continue to represent the future of CalCPA. Our growing Financial Professional membership category will continue to be an area of focus in the coming years.

We look forward to new opportunities to expand our membership. We continue to appreciate and need your involvement to ensure CalCPA continues to support our members, who are California's finest CPAs, leading business and finance professionals, students and educators.

Robert A. Reynolds CPA

CalCPA EDUCATION FOUNDATION TREASURER'S REPORT

The CalCPA Education Foundation ended the year with an increase in net assets, compared to the prior year's decrease. The increase is attributed to expense management in response to declining revenue. Total revenue continues to decrease, as our competition continues to offer low-cost or free content.

Course and conference revenue hours have declined with the shifting of courses to shorter hours and consolidation of some conferences.

The Education Foundation continues to have the resources to invest in its future. We finished the year with total assets of $11.2 million, including an investment portfolio of $9.1 million, and net assets of $9 million at year-end, an increase from the prior year.

Technology will play a large role in our future plans to remain relevant in the education marketplace. Innovation and partnerships with the CPA profession will allow the Education Foundation to continue to provide education and build knowledge to advance individuals and the profession.

Joseph A. Forlenza, CPA, CFP CRPC, APMA

ANNUAL REPORT TABLE OF CONTENTS Independent Auditors' Report 12 Combined Financial Statements: Combined Statements of Financial Position 14 Combined Statements of Activities 15 Combined Statements of Functional Expenses 16 Combined Statements of Cash Flows 18 Notes to the Combined Financial Statements 19 Supplementary Information: Combining Statements of Financial Position 26 Combining Statements of Activities 28 Independent Auditors' Report

COUNCIL CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS and BOARD OF TRUSTEES CALIFORNIA CERTIFIED PUBLIC ACCOUNTANTS EDUCATION FOUNDATION

Burlingame, California

Report on the Combined Financial Statements

We have audited the accompanying combined financial statements of CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS (the Society) and CALIFORNIA CERTIFIED PUBLIC ACCOUNTANTS EDUCATION FOUNDATION (the Foundation), which comprise the combined statements of financial position as of April 30, 2018 and 2017, and the related combined statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the combined financial statements.

Management's Responsibility for the Combined Financial Statements

Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of California Society of Certified Public Accountants and California Certified Public Accountants Education Foundation as of April 30, 2018 and 2017, and the changes in their combined net assets and their combined cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Supplementary Information--Combining Statements

Our audits were conducted for the purpose of forming an opinion on the combined financial statements as of and for the years ended April 30, 2018 and 2017 as a whole. The accompanying supplementary information is presented for purposes of additional analysis and is not a required part of the combined financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combined financial statements. The information as of and for the years ended April 30, 2018 and 2017 has been subjected to the auditing procedures applied in the audit of the combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combined financial statements or to the combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information as of and for the years ended April 30, 2018 and 2017 is fairly stated in all material respects in relation to the combined financial statements as a whole.

San Francisco, California

June 18, 2018

COMBINED STATEMENTS OF FINANCIAL POSITION California Society of Certified Public Accountants I California Certified Public Accountants Education Foundation April 30, (In Thousands) 2018 2017 Assets Current Assets: Cash and equivalents $ 4,123 $ 5,646 Accounts receivable, net 228 327 Other receivables 179 170 Receivable - affiliates 99 47 Prepaid expenses and other 614 709 Total current assets 5,243 6,899 Investments 17,103 18,708 Fixed Assets, net 19,691 20,727 Trust Assets - Deferred Compensation 1,162 1,148 Other Assets 129 147 Total assets $ 43,328 $ 47,629 Liabilities and Net Assets Current Liabilities: Accounts payable $ 398 $ 390 Accrued expenses 1,441 2,488 Deferred revenues 7,237 8,768 Deferred lease costs, current portion 246 406 Total current liabilities 9,322 12,052 Deferred Lease Costs, less current portion 393 1,098 Deferred Compensation 1,162 1,148 Total liabilities 10,877 14,298 Net Assets: Unrestricted 30,526 31,492 Temporarily restricted 1,875 1,789 Permanently restricted 50 50 Total net assets 32,451 33,331 Total liabilities and net assets $ 43,328 $ 47,629 COMBINED STATEMENTS OF ACTIVITIES California Society of Certified Public Accountants I California Certified Public Accountants Education Foundation Years Ended April 30, (In Thousands) 2018 2017 Unrestricted Net Assets: Unrestricted revenues: Dues $ 8,837 $ 8,979 Professional education programs 9,321 9,512 Peer review fees 1,280 1,364 Rental income 1,092 237 Member meetings and events 743 706 Affiliation fees 506 513 Interest and dividends, net 506 614 Advertising 479 613 Royalties and affinity programs 178 213 Other income 160 331 Total unrestricted revenues 23,102 23,082 Net assets released from restrictions 568 418 Total revenues 23,670 23,500 Expenses: Program services: Chapter events and member committees 3,443 3,417 Communication services 1,721 1,953 Peer review 1,492 1,388 Government relations 705 848 Other member activities 907 888 Professional education programs 7,723 9,325 Institute and scholarships 930 934 Supporting services: Management and general 7,324 5,215 Membership development 1,092 1,105 Total expenses 25,337 25,073 Change in unrestricted net assets before net realized and unrealized gain on investments (1,667) (1,573) Net realized and unrealized gain on investments 701 1,502 Change in unrestricted net assets (966) (71) Temporarily Restricted Net Assets: Net proceeds from scholarship events held by the Society 259 238 Scholarship contributions 23 25 Financial literacy and other program contributions 230 23 Interest and dividends, net 100 70 Net assets released from restrictions (568) (418) Change in temporarily restricted net assets before net realized and...