Key points
- Your auditor sends a request list, often called the PBC list. PBC means "prepared by client". Turn it into a tracker with an owner, a due date and a status for each item.
- Most requests fall into five groups: investor records, bank records, compliance files, the books, and valuation support.
- The auditor confirms balances and activity directly with banks, custodians and investors.
- Many audit delays come from messy records, not from hard accounting. A worked cash check below shows how to clear a difference in the month it appears.
- The fix is habit: monthly reconciliation, one person who owns the audit, and a known deadline.
It is the second week of January. The auditor's request list arrived before the holidays, and half of it is still open. Someone is digging through old email for a signed subscription agreement. A $50,000 gap between the bank and the books, first seen in March, has just turned up again.
None of that is hard accounting. It is record keeping that slipped during the year.
Start with the request list
The request list is the map for the whole audit. It names every schedule, record and document the auditor wants to see. The list is most useful when it arrives well before year end and reaches the administrator early, so both sides can agree who prepares each item and by when. An item with no owner is the one still open in January.
What auditors ask for
Most requests fall into five groups: investor records, bank records, compliance files, the books, and valuation support. The tracker below shows one row from each.
Sample PBC tracker. Each item gets one row with an owner, a due date and a status, updated on each status call. The rows below are a hypothetical example for a fund with a December year end, as of Jan 12. Set your own owners and dates with your auditor and administrator.
| Item | Owner | Due date | Status |
|---|---|---|---|
| KYC (know your customer) and anti-money-laundering files | Manager | Jan 10 | Done |
| Investor holdings and the year's activity | Administrator | Jan 15 | In progress |
| Bank statements and reconciliations | Administrator | Jan 15 | In progress |
| General ledger and journal entries | Administrator | Jan 20 | Not started |
| Valuation write-ups | Manager | Jan 31 | Not started |
A full list runs longer. It also covers subscription agreements and side letters, formation documents, the investor contact list for confirmations, and financial statements tied to the ledger.
Confirmations go straight to the auditor
Not everything on the list comes from you. The auditor sends some requests itself to banks, custodians and investors. The answers come back to the auditor directly, not through the manager.
For a fund with a December year end, the target is to have approved requests out in the first week of January. That only works if investor contact details are current.
Why audits run late
Most delays start in operations, not in the accounting. The common causes are missing documents, spreadsheet formula errors, poorly organized files and incomplete investor onboarding records. Small differences left until year end take hours to track down.
The $50,000 gap from the opening shows how. Say the fund had checked cash at March 31.
| March 31 cash check | Amount |
|---|---|
| Bank balance | $2,450,000 |
| Books balance | $2,500,000 |
| Difference (bank minus books) | -$50,000 |
| Explained: legal invoice paid by wire on Mar 28, not yet booked | -$50,000 |
| Unexplained | $0 |
The fix is one journal entry, made in early April and dated March 28, with the invoice and wire confirmation attached. Left until year end, the same $50,000 sits among a year of wires and has to be found again.
The cost of a late audit is not only time. In 2024, a regulator fined three advisers $65,000 to $80,000 each over audited statements for private funds that reached investors late or not at all. One fund's audit reports arrived 333 to 1,064 days after year end.
The deadline behind every date
Registered advisers to private funds can meet part of the custody rules by having each fund audited. They then send the audited statements to investors within 120 days of year end. Funds of funds generally get 180 days under staff guidance. Ask your counsel which deadline applies to your fund. This article is not legal advice.
What a ready fund does during the year
Five small habits, all done during the year, prevent a January scramble.
- Monthly reconciliation. Records match the bank and the administrator each month, as in the cash check above.
- One folder per investor. It holds the signed subscription, the KYC file, and each subscription and redemption.
- One NAV record per period. It notes who approved each figure and is checked against the administrator's reports.
- One contact for the auditor. That person runs a short status call every week or two while the auditor does its work.
- This year's work, saved. The tracker, the schedules and notes on how each report was pulled are kept for next year.
The letter you sign at the end
Before the auditor issues its opinion, the manager signs a management representation letter. In it, the manager confirms that the records and disclosures given to the auditor are complete. You put your name to that statement, so check each line against your tracker and reconciliations before you sign.
Now picture a fund that did this work. The tracker shows who owns every open row. The signed subscription is in the investor's folder. The March cash difference was cleared in April, with the invoice attached. The audit still takes effort, but nobody is searching old email.
Where Tahoe fits
Two rows on that tracker belong to the manager: the KYC files and the valuation write-ups. Behind them are two slow questions: what NAV the manager recorded each period, and what happened at each onboarding review. We are building Tahoe to keep those answers in one place for the manager. It works alongside your administrator and auditor, replaces neither, and does not prepare financial statements.
- Each NAV goes into a Record NAV form, and the history exports as a CSV file.
- An onboarding review queue records each approval, rejection or correction request.
- Fund documents sit in a Data Room, and the manager has an audit log.