An unannounced verification of client assets by an independent public accountant, required under the custody rule for advisers who have custody but do not use the audit exception.
Private fund managers almost universally use the audit exception instead, which eliminates the need for surprise examinations. The accountant performing the surprise exam must be registered with the PCAOB and must verify that client assets exist and match the adviser's records.
This article is for informational purposes only and does not constitute legal advice. Consult qualified professionals for guidance specific to your situation.