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July 07, 2008



An interesting article. I agree NAV divergence is troubling, but I think it arises more out of historical precedence than an urge to fudge the numbers. Most offering documents have always been prepared under mid/last traded, and lawyers have been reluctant to change them, as well as wanting old and new funds to have consistent NAV valuation policies.

But this has little to do with the auditors. The NAV reconciliation is a pain and most auditors would much prefer a system whereby financial statements NAV = trading NAV. But they cannot influence the latter as that is set out in private documents between investors and the manager. So they do everything in their power - ensuring the NAV in the financial statements is GAAP compliant and the reconciliation displayed in the notes. They have no power to influence the mechanism investors agree with the manager for valuing subscriptions and redemptions.

But yes - the valuing of complex securities is still an issue in auditing. Truly independent companies who could value these would be a godsend for auditors but would be despised by the managers


To avoid any problems on the future, you must hire an accountant, it is very important to have it.


Lots of people are hiring accountant assistance from other countries and online. there are lots of people who wants to spend less on their accountant needs.

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