Risk & Control

The Risk & Control Practice at C&A Consulting is designed to assist Alternative Investment firms to ensure that they have an effective internal controls infrastructure to protect the firm from financial loss, regulatory fines, and reputational risk. In many cases, an effective controls infrastructure helps support winning new business with raising capital from investors. Today, with much of the capital raise in the Alternative Investments space coming from institutional investors, these investors commonly require that funds that they invest in have a proper internal controls infrastructure. Often, questions around the fund’s infrastructure comes up in the due diligence process when deciding whether to invest in a fund. New regulatory requirements by the Securities Exchange Commission (SEC) have made their examinations more demanding and more comprehensive. New reporting requirements such as Form PF, FATCA and OPERA (voluntary) have placed additional workload burden on firm personnel. Required reporting to regulators and investors must be done timely, accurately and consistently. Firms commonly run a lean support infrastructure which result in little available excess staff time. Establishing proper internal controls defines accountability and responsibility.

Maintaining a proper internal controls infrastructure actually helps reduce operating costs and generally lower audit fees. Daily exceptions and mistakes typically have to be manually researched by the staff to be to resolved. Some mistakes have an additional cost factor that could be very expensive such as losses stemming from trading errors. The overall cost of handling mistakes is very expensive. So, eliminating errors and mistakes through the use of risk mitigating controls is very cost effective. Outside auditor fees are usually costly. They are even more costly without the presence of any internal controls that the auditor is able to test and rely on. If the firm has an effective controls infrastructure, the auditor can test (using statistical sampling) and rely on controls to ensure the reasonableness of the funds financial statements. The auditor will be able to reduce the amount of testing that they currently perform without the presence of controls. There may be significant audit fee costs savings depending on the amount of audit work that can be eliminated.

The Risk and Control Practice at C&A can work directly with your firm to assess, remediate, design and implement an effective comprehensive controls infrastructure that is customized to your firm. We work across disciplines that include Finance, Operations (front, middle, and back), and Technology. C&A Consulting also has a diverse group of Practices that can help firms to remediate or enhance existing infrastructure.

Risk and Control Capabilities

  • Assess the firm’s risk governance infrastructure
  • Remediate gaps and findings from the assessment
  • Design and implement a customized control program/infrastructure
  • Provide support to work with your outside auditor on the annual review and certification of the financial statements
  • Create business metrics and dashboards to monitor daily operational performance
  • Address operational risks and deficiencies
  • Address operational gaps and deficiencies stemming from gaps found from a Pre-SSAE 16 review (formerly SAS 70) on a firm’s internal controls
  • Address regulatory requirements related to Sarbanes-Oxley and Dodd-Frank