PE sponsors’ practices have become more complicated over the years as firms seek an edge when valuing Level‑3 assets and as investment strategies have become increasingly complex. That has trickled down to firms’ financial statements and the opinions provided by auditors, particularly as auditors deploy sophisticated methodologies to probe valuations; fee and expense allocations; and other critical financial reviews. Ideally, a sponsor would receive an unqualified opinion from their auditor, but it is quite common for material misstatements or other discrepancies to lead to a qualified opinion or, in the worst-case scenario, an adverse opinion. Although, institutional investors have become more sophisticated at scrutinizing PE sponsors’ practices during their operational due diligence, it can still be daunting to parse the nuances and significance of issues raised in a sponsor’s audit report or valuation policy. To help PE investors understand and navigate sponsors’ financials, the Investment Management Due Diligence Association hosted a webinar that was moderated by its co‑founder, Daniel Strachman, and featured Jennifer Cuello and Thomas Murdoch, who are both audit partners in EisnerAmper’s financial services group. This article summarizes key takeaways from the webinar, including an overview of the audit process; recommendations on what investors should look for or ask about when reviewing a fund’s financial statements; and practical tips about how to confront key issues that can arise in audits of PE sponsors. For more on the audit process, see “The Importance of Exercising Due Diligence When Hiring Auditors and Other Vendors” (Jun. 21, 2018).