Sam Kan & Company
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Sam Kan & Company
Sam Kan & Company
What is an SEC Audit? 
SEC stands for the Securities and Exchange Commission which serves as administer of the federal securities laws in the United States. The job of the SEC is to provide oversight in order to ensure that securities markets operate in a systematic and just manner while securities professionals are fair to their clients. Another purpose of the SEC is to make sure that all corporations provide readily available material for investors to have the proper decision-making information at their disposal. An SEC Audit is the tool in which the SEC can ensure that companies are complying with the regulations that it has mandated. Investment businesses consider regular audits as routine events. As such, any investment adviser will consider an SEC Audit as ultimately inevitable. Therefore, SEC compliance is a critical element of any firm’s daily operations, since a negative audit may result in deficiency letters, consumer mistrust, sanctions or other unfortunate consequences.
 
What You Should Expect in an SEC Audit? 
A positive outcome for an SEC Audit hinges on an understanding of the process, itself, and how to prepare for the details of that process. This is where a trained professional can assist you in the initial preparation. In nearly all cases, certain information will be requested in an adviser audit that will need to gathered and prepared. These items may include:
* Client lists which will include their account type as asset values
* Within a specific time frame, a list of new accounts and those accounts terminated
* Pricing and quotation services list
* Chronological list of trades
* Purchases and sales journals
 

Why is Professional Assistance Needed?

Changes at the SEC could make audits more frequent as the SEC began requiring advisers to implement formal compliance procedures and policies through the utilization of hired chief compliance officers. In light of this, an eight-page SEC document entitled “Examination Request List” surfaced, which describes the SEC’s extensive adviser audit program. In the aftermath of recent scandals, it appears that the SEC may require even more information to be included in future audits.

A CPA Auditor can help you when you find that your company is facing an SEC Audit and will make sure that financial statements are in accordance with SEC regulations. The two main qualities of a good audit assistance firm are; the diligence to prepare documentation prior to the audit in order to ensure that the audit and subsequent SEC filings are done in a timely and cost-efficient manner and a less-invasive approach to gathering information to make sure that there are minimal interruptions to your business.

With a good understanding of the SEC Audit process and acquiring the assistance of a good CPA Auditor, the audit process will allow your business to remain within SEC compliance and, in addition, inspire confidence in your clients.
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