Since opening our London office in 2017, Hedgebook Audit has established itself as the financial instrument valuations system of choice for mid-size audit firms in the UK. Almost three quarters of the Top 30 firms use Hedgebook Audit, as well as a number of smaller firms. Here are three reasons why.
1. Hedgebook Audit Assists with Valuing Financial Instruments
Hedgebook Audit does what it says on the box (even if it is a box based in the cloud!): We value financial instruments. You might be thinking that sounds complicated, and at the back end it is. But at the front end, we make it as easy as possible to input the information.
So, what financial instruments do we value?
- FX forwards
- FX options
- Interest rate swaps
- Commodity forwards
- Commodity swaps
- Commodity options
In our experience this covers off most of the financial instruments used by organisations in the UK. If you come across one we don’t value, we can either add it to our suite or give you a one-off valuation.
With Hedgebook’s clear user interface we guide you through entering the relevant terms of the financial instrument (which takes minutes not hours). Then at the push of a button your valuation is done. No more wondering if you have put the right information in. We make it as simple as possible. If there are variances or differences outside the norm, we provide back up to help you through this.
2. Hedgebook Audit Delivers Compliance
The word that sends shivers down the spine of any auditor, compliance. Are we compliant with the latest standards? And, if we’re not, are the regulators going to come down on us like a ton of bricks?
For some reason, historically, there has been a reasonably relaxed attitude when it comes to independently verifying the valuation of financial instruments. There are a few reasons for this:
- Financial instruments by nature are highly complex and can be hard to identify
- Software to value financial instruments has historically been expensive and difficult to use
- Banks have provided these numbers as a service
Materiality may be cited as a reason to not do valuations, however, how can materiality be determined without first calculating the valuation?
In some ways, all valid reasons. But as the bank cannot be considered an ‘independent’ body in this audit process, none would convince the regulators when you come to plead your case. Especially if they turn out to be incorrect, which in our experience occurs more frequently than most audit firms realise.
The good news is Hedgebook Audit covers off all of these issues and more.
- Don’t understand financial instruments? You don’t have to have intimate knowledge with Hedgebook Audit’s simple and easy to use interface.
- Expensive? Hedgebook Audit is a very cost-effective solution your clients won’t balk at if you pass the cost on to them.
- Unlike a bank, Hedgebook Audit is considered an independent source, making your audit fully compliant with required regulations.
- Valuations are very quickly available to enable a materiality judgement call
3. Cloud digital solution
COVID-19 has taught businesses a number of things. One of the important lessons from working from home is being able to easily access systems and data. Many firms have been caught out by not having an up-to-date digital approach to business.
Sharing spreadsheets on Dropbox is not a digital solution and is relatively insecure. Accessing your key systems and information via secure cloud-based solutions is not new but it is now not only the norm but what your clients expect.
Hedgebook Audit is accessible from anywhere and uses the gold standard, Microsoft Azure cloud computing service. With servers held in Europe, security and GDPR issues are easily managed. It’s not just for those working from home where cloud enabled solutions are a necessity. Audit teams working at a client’s premises, can easily access Hedgebook Audit to perform the validation checks. This adds a layer of efficiency and professionalism to the process as well.
We also have customers who appoint internal “champions”, well versed in using Hedgebook Audit, to carry out the validation process within the shared services team. Whichever way you want to use Hedgebook Audit to value financial instruments, let us share how it might work for you.
To get the conversation started, download our free Financial Instrument Planner designed to assist you and your team to identify those ‘hard to find’ yet highly auditable instances that can trip you up.
Hedgebook has a mission to help businesses of all sizes make sense of treasury and FX risk, devise profit-protecting strategies and collaborate more effectively with their bank and broker via our market-leading SaaS platform.
Contact us here to find out how we can help your business.