Moore, Brevan lead way as top groups sign up to SAS70 check

Thu Nov 26, 2009



The Madoff scandal has raised the bar on due diligence, with hedge funds rushing to be more investor-friendly and a growing list of top firms undergoing a special audit of controls


In the wake of the Madoff scandal, the pressure for tougher due diligence from hedge fund investors has intensified dramatically. Faced with more demanding and concerned investors, leading hedge fund groups have been grappling with ways to demonstrate that their businesses - unlike Madoff - are indeed honest and above board, have appropriate controls in place, comply with rules and regulations, and truly generate the returns the managers are reporting.

Now it seems that one particular process - a US auditing procedure called a Statement on Auditing Standard 70 (generally referred to as a SAS70) - is starting to gain traction as a key method for some of the biggest hedge fund groups to demonstrate that they have a robust and verifiable control environment.

At our recent Absolute Return Symposium in New York, Millennium Partners founder Israel Englander referred in particular to a so-called 'Type 1' SAS70 as one of several key steps his...

ISSN: 2151-1845 / CDC10004H

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