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If you are a senior manager or a chief financial officer, you may be asked to review the accounting reports submitted by your employees for certain transactions that have been disputed. In such cases as “what was paid for this?” or “where did these funds come from?” it will help accounting prepare their notes to have the status of the transaction as open, pending investigation, resolved, or closed. The partner and corporation audit committee should review these types of documents and there should be a process in place where all partners and partners sign off on the accounts. The reporting partner should take the initiative to follow up on all open investigation matters, provide advice or discuss any direction with the firm’s internal investigation team, and work with the client to resolve any issues. The corporation independently audits its partners’ books of account, but may also require that disclosure documents are updated as necessary. There are 3 types of partnership accounting methods that partners can choose from. These methods are called "full accrual", "partner's", and "alternate accrual". Partners can choose which method they want their partnreship to use by asking their Accounting firm to prepare their partnership financial statements accordingly. It is important to note that Partnership Financial Statements, Partnership Tax Returns, and the Statements of Partners' Capital are all impacted by the choice of partnership accounting method. The following information will help you understand these choices. "Full Accrual" Method: This method is similar to what corporations use for financial reporting. All revenues and expenses are reported on a timely basis even though cash may not have been received or paid out yet. This method applies both to accrual income statement and balance sheet. "Partners' Method": Only report income that was actually received in the form of cash or its equivalent in services rendered for the period, even though the revenue recognition criteria has been met. "Alternate Accrual" Method: A combination of full accrual and partners’ method. Only report income that was actually received in the form of cash or its equivalent for the period1. If you are a partner in a Private Equity firm, you should realize that there are 2 types of fees that your firm charges you for services rendered. These are carried interest and private equity fund management fees. A carried interest is typically 20% of the value of the profits generated by the portfolio company over time after all investments have been liquidated. A fund management fee is a typical 2% on assets under management or a 2% on profits generated by the portfolio company for between 3–7 years. Private Equity firms typically earn a carried interest by investing in a portfolio company and injecting capital into the business, while fund management fees are earned by managing the portfolio company's assets. Or you could learn from this section that how to report your partnership accounting on your financial statements. Partnerships use Financial Statements to report their performance and financial position to their partners and to outsiders, such as potential funding sources and banks, which may lend to the partnership. cfa1e77820