In the wake of several high-profile cases of fraud involving investment advisors and broker-dealers, the Securities and Exchange Commission (SEC) adopted amendments to Rule 206(4)-2 (the “Custody Rule”) under the Investment Advisors Act of 1940 in an attempt to provide additional safeguards for client funds and/or securities in the custody of a registered investment advisor (RIA).
The amendments require certain RIAs who have “custody” of client assets (directly or through a related person) to engage an independent public accountant to conduct an annual surprise examination of client assets. Furthermore, if the RIA acts as a qualified custodian for advisory clients or if they have related persons that act as qualified custodians for the RIA’s advisory clients, the SEC requires an internal control report (e.g. SOC 1/SSAE 18, formerly SAS 70).
Many aspects of assurance services benefit from industry-specific knowledge and MFA’s in-depth understanding of the investment management industry has been invaluable to our clients. We are not only well-served in issues facing your industry, but also have a solid understanding of the implications of compliance regulations for this marketplace.
MFA’s solid audit and assurance track record, combined with our extensive internal controls, regulatory and business process expertise, demonstrates the strength and range of our compliance examination services. The exceptional knowledge base and vast experience amassed over the years has resulted in our ability to consistently offer a responsive, value-driven, hands-on approach. In working with MFA, clients are secure in the knowledge that they are working with truly seasoned professionals with a track record for results.
According to SEC guidelines, the independent public accountant issuing the internal control report (e.g. SOC 1/SSAE 18, formerly SAS 70) must be a Public Company Accounting Oversight Board (PCAOB) registered firm. MFA is registered with the PCAOB and is a member of the AICPA’s Center for Audit Quality. Because MFA’s membership opens our work to review by the PCAOB, it demonstrates MFA’s confidence in, and commitment to, quality control in the preparation of informative, fair and independent audit reports.
To learn more, download our Registered Investment Advisor Services brochure.
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