•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

From Kirsten Bischoff, Opalesque New York:

Whether the move to enforce mark-to-market accounting served to fan the flames of the financial crisis or not, is an ongoing debate and typically where the focus of accounting standards discussions winds up. However for managers, another effect that hits close to home is the increased time and cost spent auditing funds. As accounting standards are in a constant refining and altering process there also lurks the ever-present danger that the misinterpretation of an unclear regulation could mean litigation.

"...Clients and their auditors have been required to apply greater levels of judgment than in the past. Audits are requiring more time, the outcomes are uncertain and costs are increasing. And no doubt everyone is aware that the application of judgment can be easily questioned in a litigious environment," Jennifer Frizelle, partner at KPMG said at the recent Opalesque Roundtable held in the Cayman Islands (Roundtable may be downloaded here: Source)

Liquidity challenges to valuations hit fund of hedge funds hardest Frizelle identified some of the additional challenges that the market illiquidity in 2008 brought to auditing funds. How should funds mark Lehman assets? And how should they reflect credit risk in the value of derivative contracts? For fund of hedge funds additional ques......................

To view our full article Click here