The client, a Private Equity firm, asked the TresVista team to perform an audit review before an SEC Audit took place for the client so that they had all the support documents/proofs to handle the queries raised by the auditors and analyze the vendor costs charged to management company, portfolio companies and respective funds as per the LPA. The client also asked us to deep dive into variances, highlight the discrepancies and provide appropriate solutions, and to check if reclassification of the expenses was required or not.
To perform an audit review before an SEC audit took place and analyze the vendor costs charged to management company.
The TresVista Team followed the following process:
• Created a comparison table of invoice data and the data uploaded on the accounting software for each invoice
• Verified the amounts allocated to various categories in respective funds and portfolio companies
• Prepared summary tables for percentage-wise allocation of the total charges allocated
• Graphically represented the total amount allocated to different entities for data visualization
• Prepared tables with reallocated/reclassified entries for the bills where discrepancies were found
The major hurdles faced by the TresVista team were:
• Developing an in-depth understanding of new platforms such as the databases used, and the supporting documents, which contained highly sensitive data related to the client’s business
• Making assumptions and thinking of logical reasonings to back those assumptions which helped the team to review their expense management system for the invoices smoothly and efficiently
• Understanding the approach that was used to derive the total invoice amounts and matching those amounts with the information that was available on the databases used
The team overcame these hurdles by developing in-depth knowledge about the software by analyzing very minute details. The team also made logical reasonings to back the assumptions made by them. Also, the approach followed in preparation of the invoices was understood which helped the team to find the discrepancies and deviations.
The TresVista team streamlined the process to save time and make the task efficient along with minutely analyzing the information available on the accounting software and the supporting documents provided to find the deviations. The team developed a solution to manage the discrepancies and deviations found while reviewing the expense management system, and suggestions for reclassification of accounts and related changes were made after discussion with the client.