Accounting is often called the language of business. Accountants are fluent in this language, having expertise in concepts ranging from accelerated depreciation and amortization to capitalization and retained income. Their work is integral to the day-to-day operations of private equity firms and other employers and the long-term financial health of their organizations. Job responsibilities for accountants vary by the size of the employer and other factors, but most perform the following duties:
- maintain and control the general ledger and various sub-ledgers
- review capital activity that pertains to the funds, including capital calls, rebalances, transfers, and distributions
- prepare and review quarterly and annual financial statements in accordance with generally accepted accounting principles
- calculate management fees
- prepare bank reconciliation documents
- maintain and update financial data in investment databases
- ensure settlements of invoices and other payments
- assist the chief financial officer with the preparation of financial forecasts and on ad-hoc projects such as portfolio risk reporting, key performance indicators reporting, liquidity reporting, and portfolio management systems selection and integration across portfolio companies
- reconcile all cash received from investors and investments
- assist in compliance monitoring and control
- prepare capital account allocation schedules (e.g., capital calls, distributions, income) for general partners and limited partners in accordance with the terms of partnership agreements
- work closely with external and internal auditors during year-end reporting
- prepare ad-hoc analytics for existing and potential clients
- prepare tax returns according to prescribed rates, laws, and regulations
- provide accounting services, as needed, to the firm’s portfolio companies
Auditors are specialized accountants who make sure that financial records are accurate, complete, and in compliance with federal, state, and local laws. Those who are employed as salaried employees by a company or other organization are known as internal auditors. “Internal auditing involves identifying the risks that could keep an organization from achieving its goals, making sure the organization’s leaders know about these risks, and proactively recommending improvements to help reduce the risks,” according to the Institute of Internal Auditors. The work of internal auditors is checked and verified by independent auditors, who are typically employed by accounting firms. Major duties for auditors include:
- reviewing the general ledger, various sub-ledgers, and other financial documents for accuracy
- identifying and resolving client issues discovered during the audit process
- recommending improvements on internal controls, operating efficiencies, and profitability to management
- conducting acquisition audits (i.e., financial analysis or “due diligence”) on a company the client is considering acquiring
- validating financial and nonfinancial data for external and internal review
- performing an annual risk assessment of the business and continuous monitoring of the plan based on the risk analysis of the critical processes
- Investment Underwriters
- Private Equity Business Development Directors
- Private Equity Chief Dealmakers
- Private Equity Compliance Professionals
- Private Equity Financial Managers
- Private Equity Investor Relations Specialists
- Private Equity Lawyers
- Private Equity Marketing Specialists
- Private Equity Research Analysts and Associates
- Private Equity Risk Managers