Articles & Alerts

Does Your Current Financial Service Provider Deliver the Accounting Services You Need?

December 9, 2021

Traditional financial service providers engage in audited financial statements, tax and accounting work, as well as consulting, for a hedge fund, general partner, and management company. Your hedge fund may have a requirement to use a certain size service provider to audit the financial statements issued to your investors. However, this does not mean you need to hire one firm for everything.

Is your current financial service provider the right fit for your organization? Do you receive the proper guidance you need? Boutique firms, like Anchin, harness deep industry knowledge to provide a cost-effective alternative that includes senior-level advice and personalized service for your entities.

Since the financial crisis, institutional investors expect and demand stronger financial infrastructure from hedge funds. Your advisor should be aware of the necessary controls, reporting requirements, and industry best practices to not only stay compliant, but also to help you present this information when you’re out fundraising.

Interested in learning more about the specific ways Anchin’s Financial Services team can meet your needs? This is the third article in a series that describes the wide assortment of services that Anchin’s Financial Services team covers – focusing on accounting.

Filling the Gap – Part 3: Accounting Services

Preparation of Financial Statements

Fund managers must prepare financial statements for their investors. These statements are an integral part of the financial reporting model and need to be prepared with specific required disclosures under generally accepted accounting principles (GAAP). Furthermore, the Public Company Accounting Oversight Board (PCAOB) standards for financial statements are even more stringent given the complex reporting and disclosure requirements set up to protect investors.

A larger, general accounting firm working across many different industries may not fully appreciate the nuances, especially as standards evolve over time. By specializing in this area, Anchin’s Financial Services team has a thorough understanding of these rules thanks to their deep industry experience, and can support your administrator as they prepare these financial statements.

Whether you are working with Anchin on a one-time or ongoing basis, our experts take the time to get to know the story behind your finances. This way, they can offer insights and advice for your fund as you get these statements together.

Researching Complex Accounting and Financial Reporting Issues

Funds are regularly involved with complicated investment transactions. Accounting and reporting requirements related to these transactions can be more complex, and understanding how to record them requires specialized expertise. Not all accounting firms have the industry knowledge needed to evaluate these transactions, which increases the chance of a financial reporting issue, potentially leading to disputes and even litigation from your investors.

Anchin’s specialists can assist you in researching these issues and assessing their impact on your financial statements as well as your operations so that you can feel confident that you have properly reported everything and mitigated your compliance risk.

Back Office Accounting Services

In addition to the traditional auditor and tax advisor role we serve for some clients, Anchin can also assist in back-office administration for funds, family offices or other investment vehicles that already have an established auditor. By outsourcing part of this work, you can save time versus filling all these roles in-house, allowing your staff to focus on their core competencies.  A boutique firm like Anchin can also provide more advanced financial infrastructure and support than you could develop on you own.

Analytical Reporting

Your financial service provider can issue a variety of analytical reports including present and past performance, asset allocation, cumulative returns, market segment analysis, and more. At Anchin, we present these reports through customized visualizations including charts, graphs, diagrams and other infographics that are both insightful and easy to understand.

Not only will these reports help you understand your situation, our clients also frequently use these aids to present to potential investors. A larger firm may not have time to help with these presentations, but with Anchin you are connected with senior managers to help prepare your pitch.

In conclusion, as you review your hedge fund’s accounting requirements and goals, consider whether you’re truly receiving everything you need from your current service provider, or if a specialty advisor like Anchin could help fill the gaps.

If you have any questions about how Anchin’s Financial Services team can be of assistance to you, please contact Ed Thorp or your Anchin Relationship Partner.

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