Debra Martin, Loyola Law School Sue Menditto, NACUBO Roger Patterson, UNC – Chapel Hill Mary Wheeler, Cornell University. Accounting Principles Council Update. Tuesday, July 11. AICPA Alternative Investments Task Force. Alternative Investments.
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Sue Menditto, NACUBO
Roger Patterson, UNC – Chapel Hill
Mary Wheeler, Cornell University
Tuesday, July 11
What are alternative investments? Hedge funds, private equity, venture capital funds, commodity funds, fund-of-funds (to name a few) – typically in the form of limited liability partnerships, limited liability corporations, trusts …
Why are we talking about them? Auditing challenges posed by investments in non-publicly traded entities raised by 2005 AICPA interpretation…left controllers scrambling for FY05 year-end audits with many questions still unanswered heading into FY06 year-end.
NACUBO Understanding of the AICPA Practice Aid
Assessing the reasonableness of fair values provided by investment managers:
ascertaining the nature of the underlying investments (i.e.
marketable securities, derivatives, private companies, real estate, etc).
(a) whether the independent auditor’s opinion is unqualified on a GAAP basis or modified;
(b) the audit firm (ascertain credentials, if you are unfamiliar with the audit firm);
(c) disclosed valuation methodologies;
(d) other disclosures which may impact on valuation or the institution’s own disclosures;
(e) date of independent auditor’s report
(f) subsequent events footnote, if any
(g) develop historical data on the change in valuation in the lag period (calendar year end or March 31 roll-forward for alternative and June 30 report date for institution)