If you operate fund business, it may be requested by investors or other interested parties to take external audits so that they can make investment decisions with reliance on its performance. Specifically, a statutory audit is required if limited partnership (LPS) is established in Japan, however, investors sometimes demand fund operators to take audit conducted by CPA.
If incorporating a fund entity in Japan, there are several types of entities such as limited partnerships, partnership contracts under the Civil Code, Tokumei-Kumiai contract (TK structure) and special purpose companies (SPC/TMK), etc. And then, in most cases where significant investors are involved, such fund entities are audited according to investor’s request or contract provisions.
Our Advantageous Points
We sometimes hear some cases that a large amount of audit fee is unnecessarily charged by audit firm only because the audit report written in English is required. And there seems to be a misunderstanding that only big audit firms can perform such a fund audit. However, audit for fund businesses is not categorized as a difficult one compared to a listed entity, because its operation is straightforward.
When we provide audit services for fund businesses requiring to report in English, staff members with sufficient experience overseas are assigned. However, we charge an appropriate charge on necessary tasks and it is different from Big4 firm charging extraordinary rate for partner, etc. Thus, we are able to maintain a reasonable level of audit fees for fund entities.
In order to improve the performance of fund business, it is needless to say you need to reduce indirect expenses as much as possible. If considering audit service with a reasonable fee, you may take into account the option of asking an audit to us.
Examples of fund business which should consider our service
- Fund business requiring to provide audit reports and financial reports in English for foreign investors
- Funds business paying high audit fee to big audit firm only because it has trouble in performing audit procedures in English
- Funds business asking audit to Big4 firm, however, dissatisfied with their service (for example, inexperienced staff is assigned because of small size of fund)