Walter & Shuffain - Certified Public Accountants & Business Advisors

Registered Investment Advisors

Surprise custody examinations (known as surprise audits) must be conducted annually for Registered Investment Advisor (RIA) firms to maintain compliance with the Securities Exchange Commission, and you must report the CPA firm you’ve engaged on your Form ADV. Walter & Shuffain is here to help you fulfill this requirement.  

Custody Rule 206(4)-2 under the Advisers Act 

Rule 206(4)-2 regulates the custody practices of advisers registered under the Advisers Act. The rule requires advisors that have custody of client securities or funds to implement a set of controls designed to protect those client assets from being lost, misused, and misappropriated. 

RIAs that are deemed to have custody of clients’ assets must retain an independent accounting firm to conduct an annual surprise exam. If you have marked “yes” to question 9A (Do you have custody of any advisory clients?), you are required to list the name of your independent public accountant in Section 9.C. of the Form ADV and have a surprise exam conducted, and the result of the exam submitted to the SEC. 

We help RIA firms with surprise audits 

Walter & Shuffain, P.C. has a deep understanding of the RIA profession, and we are well-versed in the rapidly changing regulatory environment you face. We know the challenges of managing your compliance, and we can help you find solutions as well as optimize your firm’s processes. 

Walter & Shuffain provides surprise custody examinations to RIAs subject to the Custody Rule, and we are well-equipped to assist with your surprise audit because: 

  • We are registered with the PCAOB which qualifies us to perform audits of pooled investment vehicles.  
  • Our professionals have performed surprise custody examinations for over 30 years and currently conduct approximately 20 surprise custody examinations per year.  
  • We have developed an efficient and effective custody examination program over our decades of conducting these audits.  

We aren’t just a one-stop-shop for surprise audit services. We’ve invested the time and energy into understanding the RIA industry and what it takes to manage your compliance. Our goal is to go beyond checking the boxes to provide value to your compliance program.