Independent financial-statement audits for private venture capital funds.
LNB Accounting combines senior CPA involvement, direct coordination with your fund administrator, and an organized audit process. Our work focuses on investment holdings and fair value, partner capital, fees, allocations, and disclosures—with the scope, information needs, and target timetable established at the outset.
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SAN FRANCISCO BAY AREA CPA GUIDANCE FOR AUDITS, TAX STRATEGY, AND DEAL-READY FINANCIALS
A venture fund’s financial statements bring together private investment valuations, investor capital activity, management fees, carried interest, and disclosures. Supporting information may sit with the fund manager, administrator, portfolio companies, and other advisers.
LNB plans the audit around the fund’s structure, investment terms, and reporting requirements, identifying significant information needs early and coordinating requests with the appropriate people.
Direct access to the CPA leading your engagement, with significant matters discussed early and clearly.
A coordinated request process with fund management and the administrator, with clear ownership of outstanding items.
Suralink for document requests and uploads; Thomson Reuters Engagement Manager for LNB’s audit documentation and review.
A written scope and fee proposal, an agreed timetable, and early discussion of developments that could affect the engagement.
Our audit addresses the fund’s financial statements as a whole. We tailor the procedures to the fund’s activities, significant balances, disclosures, and assessed risks.
Investments and fair value
Investment ownership, security terms, transactions, and evidence supporting management’s valuation estimates.
Fees and carried interest
Management-fee calculations, relevant offsets and waivers, carried-interest allocations, and investor-specific provisions.
Statements and disclosures
Management-fee calculations, relevant offsets and waivers, carried-interest allocations, and investor-specific provisions.
Partner capital and allocations
Capital calls, contributions, distributions, transfers, and allocations under the governing agreements.
Cash, expenses and balances
Cash, accrued expenses, related-party balances, and other significant assets, liabilities, and commitments.
Reporting and communication
The independent auditor’s report and required communications with management and those charged with governance.
When to discuss a venture capital fund audit
An agreed audit timetable, a tailored document request list, communication of significant audit matters and proposed adjustments, and the independent auditor’s report and required communications.
Fund management remains responsible for the accounting records, financial statements, investment valuations, and investment decisions. LNB independently evaluates the financial statements and supporting evidence as part of the audit.
The audit engagement does not include fund administration, tax returns or Schedule K-1 preparation, legal advice, or separate audit opinions on portfolio companies. Any additional services require separate scoping and an assessment of auditor independence. An audit opinion does not guarantee investment performance.
Looking for fund accounting or administration instead?
We assess fund structure, reporting needs, auditor qualifications, independence, and timing. For an auditor change, we obtain authorization and perform required predecessor inquiries before final acceptance.
We agree the engagement terms and timetable, establish the document request list in Suralink, and coordinate responsibilities with management and the administrator.
We examine records and supporting evidence, evaluate significant estimates, and discuss questions and proposed adjustments as the work progresses.
We complete our review, communicate significant matters, and issue the appropriate auditor’s report when the necessary evidence and completion requirements have been satisfied.
Planning your next annual audit or considering a change of auditor? Tell us about your fund structure, year-end, administrator, and target reporting date. We will discuss engagement fit, information needs, and the next steps toward a scoped proposal.
Our broader practice supports funds, portfolio companies, and the investors around them.
Broader services are separately scoped and subject to independence requirements.
Still have some questions?
Let us know how we can help you.
It is an independent audit of a venture capital fund’s financial statements. The auditor obtains evidence about the reported amounts and disclosures, including significant investment valuations and partner activity, and issues an opinion on the financial statements under the applicable reporting framework.
Audit obligations depend on the fund’s structure, adviser status, governing documents, investor agreements, and applicable rules. Your legal and compliance advisers should confirm the requirements for your fund. If an audit is needed, involve the auditor early enough to plan around the reporting deadline.
Fund accounting records investment activity, capital calls, distributions, partner allocations, and the balances used to prepare financial statements. A fund audit is an independent examination of those financial statements. The fund manager remains responsible for its records, valuations, and statements.
LNB must assess auditor independence before accepting an audit for a fund whose accounting records we maintain. Depending on the work performed and applicable independence requirements, another CPA firm may need to issue the audit opinion. LNB can discuss separately scoped accounting and audit coordination needs with you.
Common requests include financial statements, a general ledger, partnership and investor agreements, investment schedules, valuation support, bank or custodian statements, capital call and distribution records, fee calculations, and partner capital account reports. Your auditor will tailor the request list to the fund.
Timing depends on the number and type of investments, fund structure, quality of the records, valuation evidence, and how quickly management and the administrator respond to requests. Contact LNB ahead of the target reporting date so the team can assess the scope and agree on a workable schedule.
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