Navigating the annual audit with ease

The annual audit can be seen as a daunting process for private equity and venture capital firms, but with the right strategies, it doesn’t have to be. Clear communication, smart technology use, and proactive planning can significantly streamline the audit process, reducing stress and time spent on preparation.

We sat down with the experts

We recently sat down with Nina Labatt, COO & CFO of the $2 billion VC firm Section 32, and Madison Sinclair, Assurance Principal at BDO, to get their insights on navigating the audit process. Here’s what they had to say about best practices and practical strategies for making audits smoother.

1. Communication is key to preventing roadblocks

Labatt and Sinclair emphasize the importance of proactive, ongoing communication. “It all comes down to early communication and a super-organized approach for everyone involved,” says Labatt.

By kicking off audit season with a detailed review and maintaining regular engagement, particularly around key events like exits and fundraises, potential roadblocks can be addressed early on.

2. Streamline with self-service platforms

Labatt’s team at Section 32 gives auditors temporary access to Aumni, allowing them to self-serve and significantly cut down on back-and-forth communication. Sinclair echoes this, saying, “The more access we have, the more we can answer our own questions by looking at the data.”

This access helps auditors identify trends and contextualize numbers, ultimately speeding up the audit process. With platforms like Aumni, firms can facilitate data sharing while enabling auditors to independently verify crucial information.

3. Tackle valuation challenges early

Navigating valuations can be challenging for alternative investment firms, especially for companies that raised funding in a competitive market. Labatt and Sinclair recommend having structured conversations with auditors at the start of the process to identify riskier valuations that may require additional scrutiny.

This early approach provides finance teams with more time to prepare for in-depth analysis and aligns everyone on expectations, reducing surprises during the audit.

4. Adapting to industry changes

The audit landscape is rapidly evolving, with more firms registering as Registered Investment Advisors (RIAs) and facing increased SEC oversight.

Sinclair notes that these changes are driving new compliance requirements around marketing, communications, and digital custody. “There are very strict rules about how you can communicate with investors and maintain records of those communications,” she explains. Staying aware of these shifts and understanding new regulations helps firms stay compliant.

Listen to the full conversation

For even more insights, listen to the full audio conversation with Nina Labatt and Madison Sinclair, where they dive deeper into these strategies and share additional tips on making audits smoother and more efficient.
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Ready to simplify your next audit?

Consider scheduling a demo with Aumni to see firsthand how our platform can support your audit needs, improve compliance, and ensure smoother interactions with your auditors.