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North Carolina Clarifies Financial Reporting Requirements for IAs with Custody

By Jim Hamilton

North Carolina-registered investment advisers with custody of their clients? funds or securities or who require prepayment of advisory fees of at least $500 per client six months or more in advance must send the North Carolina Securities Division a copy of an audited balance sheet within 90 days of the advisers? fiscal year-end, effective March 11, 2011 by policy statement bulletin. The balance sheet must conform to generally accepted accounting principles and be audited by an independent public accountant or CPA in accordance with generally accepted auditing standards accompanied by an opinion as to the advisers? financial position with a note about the principles used to prepare it, the basis of included securities, and other any explanations needed to clarify the opinion. North Carolina-registered investment advisers with discretionary authority over their clients? funds or securities must send the North Carolina Securities Division a copy of a balance sheet (that may be unaudited) within 90 days of the advisers? fiscal year-end. The balance sheet must conform to generally accepted accounting principles and include a representation by the preparer that the balance sheet as true and accurate as of the investment advisers? fiscal year-end.

Full post as published by Jim Hamilton's World of Securities Regulation on March 30, 2011 (boomark / email).