Solving the audit enigma

Christian Pollard, Opus Fund Services

By Christian Pollard - Every year Opus participates in hundreds of audits where the goal is to distribute a clean set of audited financials out to interested parties in a timely manner. Each party involved in the audit shares a common desire for the process to be completed as smoothly and as quickly as possible, with minimum stress. However, it should not be underestimated how challenging this can be. A smooth audit process requires the manager, the administrator and the auditor to synchronise and work in tandem. Issues may arise anywhere within the 23 key milestones that Opus has identified as being critical to the process. 

Opus’ suite of proprietary tools that are implemented as part of its core fund administration offering ensures issues are avoided, stress is mitigated, and issuance is timely while providing real time transparency to clients via the Symphony dashboard.

A well-planned audit starts four months prior to the end of the financial year end and in fact nearly half of the critical audit milestones that Opus presents to clients via Symphony are achieved in-advance of the financial year end. At Opus, the audit cycle starts with the completion of the annual client questionnaire. This ensures the correct parties are included in the planning process, that the correct individuals have access to the data required when they need it and to establish the desired timeline for the provision of financial statements and tax data to investors.

During the planning call the milestones are populated with target dates and these are displayed via the Symphony dashboard so managers can monitor progress in real time. Once milestones are agreed, typically 12 weeks prior to the financial year end, Opus issues a draft copy of the financial statements to auditors along with the relevant support to allow auditors to complete their interim audit procedures and ultimately agree on the wording of the financial statements. This process seeks to ensure not only that the notes and substance of the end financials are agreed ahead of year end, but this also eliminates the rounds of cosmetic comments often requested after year end when the timeline is tight. 

With these planning stages behind us, once the financial year end NAV is signed off, the year-end process can begin. Information required during the monthly NAV preparation cycle does differ from what is needed for the preparation of the fund’s financial statements and if done manually this process could take hours. With all managers competing for priority delivery, Opus developed an automated financial statements builder that generates the core financials at the press of a button. This allows the financial reporting team to focus on analytical and cosmetic review, resulting in financials being available within hours of the year end NAV being finalised, rather than days or even weeks.

This provides auditors with the head start needed to finalise their audit processes in a timely manner. Opus’ suite of tools do not stop there. One of the intrinsic challenges with the audit process is the reliance on email communication between the connected parties. Opus fielded over 30,000 emails for the last audit cycle, and this cannot be managed via multiple outlook accounts and multiple points of contact. All communications are centralised through a single purpose-built proprietary communication application that ensures queries are responded to effectively and efficiently by a dedicated audit support team that operates on a 24/5 basis. The result is that over 50 per cent of the 30,000 emails were actioned within 60 minutes of receipt. 

Once the audit is concluded, Opus issues an automated score card that provides analysis of the various data points that are tracked through the audit cycle. This includes the number and types of comments raised on each draft, the number of revisions requested, the turn-around times of both auditor and administrator, the number of emails exchanged, and other similar fields that tell the story of the audit process. These results are assessed against the Opus benchmark and those scores that fall below the benchmark are then assessed and de-brief calls are arranged with the involved parties.

A smooth and stress-free audit process allows our clients to focus on attracting capital, identifying investment opportunities while leaving the administrator to ensure the audit is completed well ahead of the target end date. Throughout the process our clients can monitor real time status, turnaround times, financial statement queries, comments, and progress to key milestones via the dashboard. Unparalleled transparency that ensures each party in the process plays their part. A seamless audit process is a win for investors, managers, auditors, and the administrator, so ensure you have the tools at your disposal to ensure a stress-free audit season in 2021 and beyond by choosing a service provider that has the capabilities to keep all parties on track. 

Christian Pollard, Regional CEO, Opus Fund Services
Christian Pollard serves as Regional CEO of Opus Fund Services an Irish Regulated Fund Administration company and as Senior Vice President of the Opus Group. Christian has worked in the financial services industry for many years.

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