What it is
A fund’s audit turns on three things: that the investments exist, that they are valued fairly, and that every investor’s capital account is right. Level 3 positions, side pockets and fee calculations are where errors and management bias show up. This program sets out the procedures with the assertion each one supports.
It is a five-tab workbook with an instructions tab, an overview, a risk tab, the numbered procedures and tie-outs to net assets. General procedures needed on every audit are added. It assumes the fund reports as an investment company.
When to use it
- At planning for the audit of a hedge fund, private equity fund or fund of funds.
- During fieldwork, to track confirmations, valuation work and capital account testing.
- At review, to see open items and exceptions by section.
What’s inside
- Confirmation of custodian, broker and investee fund positions
- Level 1, 2, 3 and net asset value valuation procedures
- Capital account allocation, subscription and redemption testing
- Management fee, incentive allocation and financial highlights recomputation
- Administrator controls, tax and investment company status
Standard cited
This template follows ASC 946 / ASC 820. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Can we rely on the administrator’s numbers?
Not without understanding their controls. The program has the auditor evaluate a service auditor report if one exists and perform substantive procedures where it does not.
What about investments valued at net asset value?
The program tests the latest investee report, adjusts for the gap to year end and evaluates the investee’s own audit, and tests the disclosures.
Does it work for a fund with few investors?
Yes. It suggests testing all investors for small funds and a sample for larger ones, under your firm’s sampling policy.
Related templates
- Fund Capital Account Rollforward Workbook
- Fund Management Fee and Carried Interest Recalculation
- Audit Program: Investments and Securities
- Confirmation Control Log (AU-C 505)
Last updated 11/05/2026. All free templates.