Hedge funds Audits

Hedge funds is a privately offered investment vehicles in which the contributions of the high net worth participants are pooled and invested in a portfolio of securities, commodity futures contracts, or other assets. The “Hedge Fund” definition has come to incorporate any absolute return fund investing within the financial markets (stocks, bonds, commodities, currencies, derivatives, etc) and applying non-traditional portfolio management techniques including, but not restricted to, shorting, leveraging, arbitrage, swaps, etc. Hedge fundscan invest in any number of strategies and they are perhaps most readily identifiable by their structure, which is typically a limited partnership (the manager acting as the general partner and investors acting as the limited partners) with performance related fees, high minimum investment requirements and restrictions on types of investor, entry and exit periods. During the audit period, the auditor will work with the hedge fund manager to review the hedge fund’s valuation methodology as well as the implementation of that methodology.  The auditor will also review the fund’s account statements, including the profits and losses. The most clamorous reasons cited by the votaries of regulating the Hedge Fund industry is the incredible growth of hedge funds and the increased influence and power that hedge funds are having on the financial marketsAn Fund audit is the examination and verification of a company’s financial statements and records, and in the United States, examination for their compliance with Generally Accepted Accounting Principles (GAAP).

American Institute of Certified Public Accountants (AICPA)

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