The report should include a narrative description of the irregularities disclosed or discovered and the steps the adviser has taken to verify the amounts. Details should be provided of:-

    • How the irregularities arose
    • The extent of the irregularities
    • The supporting documentation and
    • Any assumptions made in arriving at the amount of the irregularities

The capital statements will be the primary exercise to establish the level of omitted profits but some independent check of these results should be made. It may be that a detailed review of the prime records will establish with some precision the level of omitted profits and that this review may support the results of the capital statements. Otherwise, the economics of the business should be considered, and possibly a business economic exercise prepared, to demonstrate the logic and consistency of the results shown by the capital statements.

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