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CS Professional · IFSCA - Regulations, Listing and Compliances · Fund Management Services

Kaveri Growth Fund, a scheme managed by an FME in GIFT IFSC, has closed its financial year. The FME wants to share unaudited internal accounts with investors as the annual report. Which position is correct?

The scheme's annual accounts must be audited by an independent auditor before being reported to investors. Investor consent, profitability or the type of scheme does not waive the audit, so sharing unaudited internal accounts as the annual report is not acceptable.

  1. AUnaudited accounts suffice if investors consent in writing
  2. BAnnual accounts of the scheme must be audited by an independent auditor before reporting to investorsCorrect
  3. CAudit is needed only if the scheme has made a profit
  4. DAudit is required only for retail schemes and never for restricted schemes

Explanation

Ongoing reporting requires the scheme's annual financial statements to be audited by an independent auditor. Investor consent or profitability does not remove this requirement. The audit duty is not limited to retail schemes.

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