Regulatory Compliance Association Reviews

Audit Impact of Enforcement Actions 2

Practice Edge 02

Successfully Managing the Impact of Regulatory Investigations, Allegations of Fraud or Potential Illegal Acts on the Fund’s Financial Reporting Process and Annual Audit™

Date: September 30, 2014
General Session: 12 Noon to 1:30 PM
Location: Webcast (Free)

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This session will highlight the actions needed to be considered by management and legal counsel that will be required for the Fund’s financial reporting and annual audit processes. The Session will include a discussion of the applicable accounting standards and guidance, the 6 to 8 Key disclosures which will require modification and or accrual in the Funds financial statements, the analysis management should perform to properly assess these areas, the 8-10 Key impacts on the annual audit including additional procedures which will likely be required, changes to management’s written representations to the auditor, potential impact on the auditor’s opinion and the relevant auditing standards which provide audit guidance regarding these matters.

The Session will also highlight the importance of setting the scope of management’s and external legal counsel’s response which likely will include potentially extensive investigatory procedures. The panel will also discuss the audit requirements for communication with management, those charged with governance, and external counsel and the access needed by the auditor. The participants should learn the significant decisions which need to be addressed very early in the response process to better insure a timely financial reporting and audit process and to allow the auditor to obtain the required audit evidence to render an opinion, without limitation as to scope.

Participants will become familiar with the following:

1) Identification of the Key factors in assessing the significance of the Regulatory Investigation, Fraud or Potential Illegal Act and the major considerations for planning a comprehensive management response including those factors impacting the Fund’s financial reporting process and annual audit.

2) Scoping with external counsel an engagement which will include sufficient investigatory procedures for the needs of management in connection with the financial reporting process and for the needs of the Fund’s auditor.

3) Identification of the 6-8 major areas of impact on the Fund’s financial statements and identification and summary of the relevant accounting literature, including:

    • Accrual of legal and professional costs
    • Disclosure related to the matter
    • Modifications of disclosure related to guarantees, risks, and uncertainties
    • Consideration of disclosure of subsequent events
    • Potential going concern considerations and other footnote disclosures.

4) Identification of the 6-8 most likely modifications to the audit scope and the relevant auditing standards applicable to accruals of legal costs, guarantees and indemnifications, internal control, subsequent events, and potential going concern matters.

5) Identification of the specific audit guidance and requirements for communication with external counsel, assessment of the scope of external counsel or management’s investigation, and assessing the probability of and a range of possible loss and the related disclosure.

6) Identification of potential impact on the auditor’s opinion and the relevant auditing standards on reporting.


Session Chairman:

  • Walter Zebrowski, JD, CPA, Principal, Hedgemony Partners
    Chairman, Regulatory Compliance Association

Lectures One and Two:

Senior Fellow from Practice:

  • Anthony Artabane, Managing Member of Anthony Artabane CPA, PLLC, PwC*

Guest Lecturers:

  • Gerald Russello, JD, Partner, Sidley Austin
  • Kevin Bandoian, CPA, Partner | Regulatory Financial Advisory Services, PwC
  • Kevin Kelcourse, JD, Assistant Regional Director, SEC
  • Andy Fish, JD, Partner, Lockelord
  • Patricia Poglinco, JD, Partner | Investment Management Group, Seward & Kissel

Lecture Three:

Senior Fellow from Practice:

  • Anthony Artabane, Managing Member of Anthony Artabane CPA, PLLC, PwC*

Guest Lecturers:

  • Kenneth Berman, JD, Partner, Debevoise & Plimpton
  • John Buretta, JD, Principal Deputy Assistant Attorney General, U.S. DOJ**
  • George Canellos, JD, Co-Director, Enforcement, SEC**
  • John Hague, CPA, Partner, McGladrey
  • Leslie Lake, Managing Member, Invus Finanical Advisors

*Formerly Of