Asset Management Companies
Audit and Inspection In Asset Management Companies (AMCs)
Audit and inspection in Asset Management Companies (AMCs) in India are critical for ensuring compliance, maintaining investor trust, and adhering to the legal and regulatory framework established by SEBI (Securities and Exchange Board of India) and other governing bodies. Here’s a breakdown of the key components
Types of Audit in AMCs
Internal Audit
Conducted by internal teams or outsourced professionals.
Focus Operational efficiency, risk management, adherence to SOPs, and internal control systems.
Frequency Ongoing or periodic (quarterly/half-yearly)
Key Areas
Fund accounting and NAV computation
Compliance with investment limits
Monitoring related-party transactions
Anti-Money Laundering (AML) checks
IT systems and cybersecurity.
Statutory Audit
Conducted by external auditors as mandated under the Companies Act, 2013
Focus Ensures true and fair presentation of financial statements
Frequency: Annually
Reports filed with SEBI, AMFI (Association of Mutual Funds in India), and stakeholders.
Regulatory Inspections by SEBI
Conducted by SEBI officials to ensure AMC compliance with regulations
Frequency Typically biennial or surprise inspections
Focus Areas
Adherence to SEBI Mutual Fund Regulations
Investor grievance redressal
Portfolio compliance and asset allocation
Disclosure of risks and returns
Concurrent Audit
Conducted alongside real-time operations
Focus Monitoring specific areas like NAV computation, fund transfers, and investment compliance
Frequency: Monthly or quarterly
Mandated for certain high-risk operations
Forensic Audit
Investigative in nature, typically triggered by red flags or complaints
Focus: Detection of fraud, misrepresentation, or fund mismanagement
Finakon’s Digital Audit solutions help proactive adherence to audit findings and leveraging technology can help AMCs maintain high governance standards and build investor confidence.
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