The SEC’s 2025 examination priorities—released ahead of the new fiscal year and gaining traction this April—highlight a stronger focus on areas that directly impact how alternative investment companies prepare for audits.
Key Areas the SEC is Watching
For 2025, the Division of Examinations is focusing on:
Fee and Expense Calculations
The SEC wants to ensure investment firms are accurately calculating and allocating fees, with a special emphasis on transparency and consistency with investor disclosures. Expect audit teams to scrutinize these areas closely.
- Books and Records
Maintaining clean, complete, and accessible financial records isn’t just good practice, it’s a regulatory requirement. Firms should double-check how they manage fund-level accounting, capital accounts, and valuation methodologies before auditors come knocking. - Compliance with New SEC Rules
Although some rules (like the Private Fund Adviser rules) have faced legal pushback, auditors are still assessing firms for how well they’re adapting to evolving expectations.
Don’t Overlook Cybersecurity & AI
This year’s examination priorities also include cybersecurity and the use of emerging technologies like AI. While these may seem like IT concerns, audit procedures are evolving to include controls around data security, third-party vendors, and algorithm oversight—especially in firms using automated investment strategies.
What Firms Should Do Now
- Reassess internal controls
- Review fee allocation methodologies
- Ensure cybersecurity documentation is audit-ready
- Prepare for SEC-style inquiries in the audit process
The SEC’s focus is sharper than ever—and your audit preparation should be too. Whether you manage a hedge fund, private equity fund, or crypto fund, now is the time to ensure both your financial audits and regulatory obligations are aligned. Preparing for one supports the other—regulators and auditors often examine the same risk areas. Working with a CPA firm that understands today’s evolving compliance landscape can help you stay ahead of both. Contact us today to learn how we can help you stay compliant, confident, and audit-ready for 2025 and beyond.