Financial Services

Distribution of Appreciated Securities in Redemption of a Partner's Interest New Tax Laws Affecting Investment Partnerships

Acknowledging the complex financial services environment which exists in the 21st Century, we have made a commitment to provide preeminent services to this specialty market . When choosing an accounting firm, investment partnerships, broker/dealers, investment advisors and mutual funds often have the following specific concerns:

• Experience
• Timely Delivery
• Staff Expertise
• Information Systems Consulting
• International Expertise
• Tailored Services

For more than 25 years, we have created specialized services and groomed professionals to service our financial industry clientele. We pride ourselves on being aware of the opportunities that are available, as well as the obstacles that may be encountered.

Our current client roster includes more than 400 investment partnerships, hedge funds, broker/dealers, investment advisors, securities specialists, and mutual funds. For these clients, we provide accounting and auditing, tax compliance and planning, operational consulting, estate and trust consulting, and management and computer consulting services.

We have developed strong working relationships with the industry's top prime brokers and attorneys. This translates into cost savings for you. Start up time is minimized, and productive relationships have already been established.

Timely Delivery
We know the importance that the fund's management and investors place on the timeliness of interim and year-end financial statements and estimated and year-end tax information. Our experience coupled with our client service approach means that we deliver your financial statements and tax returns on time.

Staff Expertise
Clients do not like to feel that they must train the accountants assigned to their engagement. We conduct courses specifically for those staff accountants who service our financial services clients. They are taught about the business, what they will encounter, and what they should look for. In addition to internal training, many staff members attend lectures, symposiums, and courses offered by some of the best financial schools in the metropolitan area.

Information Systems Consulting
We are experienced in the application of the computer and recognize its potential to minimize the cost of the audit. We receive electronic downloads of client information from many brokers. Our internal system then analyzes the data and tailors it to our requirements, allowing us to use our manpower more efficiently.

Our senior tax advisors have worked closely with our information systems consultants to develop state-of-the-art software packages designed to streamline operations and to integrate tax planning into operational decisions. Our proprietary schedule K-1 package provides you with a clear, concise reconciliation of each of the related schedules. Each product that we design is customized to maximize its professional appearance, thereby enhancing its utilization as a marketing tool.

Our custom tax layering program has set a standard for the industry. It enables the most equitable form of tax allocation among partners of investment partnerships. This software package effectively allocates taxable gains to those partners who realized the economic benefit. It ensures that no individual will be charged with an inequitable amount of taxable realized gains or losses.

International Expertise
The advent of modern communications technology has transformed the financial services industry internationally. As part of this community, we are cognizant that many of our financial services clients may have significant foreign investors. Our international clients include expatriate U.S. citizens living overseas, as well as foreign companies and citizens, who are either conducting business or accumulating assets in the United States. The key to our success with our international clients has been our ability to assist in the creation and implementation of foreign investment entities, the development of strategies for foreign exchanges, swaps, inbound/outbound transfers, and the accumulation and movement of wealth. An expression of our commitment to our international focus is the fact that we are a member of HLB International, a world-wide network of independent accounting firms and business advisors. These 90 firms represent all corners of the globe, and we are able to tap into this resource network for the benefit of our clients.

Services

Tailored Services for Investment Partnerships and Hedge Funds
Our approach is to tailor our service to suit your needs. Some of our clients need full bookkeeping support while others require only quarterly or annual financial statements and tax returns.

On a recurring basis, we prepare financial statements, conduct financial statement audits and perform in-depth operational audits from a system analysis viewpoint. Our experience gives us a thorough understanding of the unique aspects of the financial services industry and enables us to conduct an efficient and cost-effective audit as well as provide valuable consulting assistance to management.

All of our work with partnership entities is geared towards maximizing tax benefits for our clients and their investors. Our tax services include planning in addition to the preparation of required annual tax returns. We also assist our clients with tax examinations and other governmental inquiries and correspondence.

We have been instrumental in the formation of new partnerships. We work directly with the attorneys involved to create an agreement that will maximize the tax benefits and promote the smooth running of the entity. Some common areas of concern include:

• Classification as a "trader" or "investor"
• Allocation of realized and unrealized gains and losses
• Beneficial methods of compensating the general partner
• Beneficial structures for the general partner
• Treatment of contributed securities

In addition, we are involved in issues pertaining to ongoing operations such as the allocation of "Hot Issue" income, the determination of Unrelated Business Taxable Income and the treatment of distributions of appreciated property and in issues pertaining to the termination of the partnership or redemption of its partners.

Tailored Services for Broker/Dealers
Broker/dealers operate within an intricate framework of regulatory reporting requirement. The SEC, the NASD, the CFTC, the NFA and other self-regulatory organizations have adopted rigorous standards regarding operating procedures and controls, as well as a strict code of reporting deadlines.

As industry specialist, we realize the critical impact that meeting these requirements has on the future of the business. Meeting these filing dates on a timely basis requires an in-depth understanding of the nuts-and-bolts of procedural reporting.In addition, it demands that we stay cognizant of which transactions and investment vehicles will trigger new reporting requirements.

Our policy of maintaining continuous contact with you is the approach that we utilize to keep abreast of new developments. We review the client's FOCUS reports to identify potential net capital, or other regulatory issues. Annually, we issue an internal control report, as required by the SEC. This report documents that the broker/dealers' operations are in compliance with regulatory requirements.

Tailored Services for Mutual Funds
We offer a full range of services to support the requirements of the fund's management, both now and in the future. For some clients this includes helping them in their efforts to establish new funds. For still others, this involves research and consulting regarding operations or accounting for and taxation of various instruments and strategies.

Securities and Exchange Commission Compliance Consulting
We are well-versed regarding SEC rules and regulations, and we continuously monitor compliance provisions for all of our audit clients. For each engagement we test that internal controls are operating properly and that all activities are in accordance with the prospectus. This includes testing the methodology and resultant market value pricing of the portfolios.

We review existing procedures to ensure that they are satisfactory for maintaining adequate control over asset recordkeeping and shareholder accounts. If necessary, we investigate any areas of concern, and issue interim management reports which discuss our recommendations for enhancement.

We verify that each portfolio has complied with the tax requirements that enable it to qualify as a regulated investment company. Our tax services include testing compliance as well as the preparation of required annual tax returns. In addition, we advise our clients regarding the timing and taxability of distributions.

Analytical Reporting
We issue various analytical reports for our clients including, for example, present and past performance, asset allocations, cumulative returns, market segments, etc. Often these analyses are presented by customized charts and diagrams that are both informative and pleasing to the eye. These aids are commonly used for present and potential investors, vendors, suppliers and lenders.

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