FSA uncovers serious failings in auditor reports

25 March 2011 3:52 pm | By Natalie Holt

The FSA has referred several auditors to their relevant auditing bodies after uncovering serious failings in their client asset reports.

The regulator published a consultation paper on improving client assets in September, following a review in 2009.

It found auditors were providing unchanged or ‘clean’ reports despite significant breaches of client asset rules.

The FSA has now put out its final rules for auditors which include the requirement for a template to be used for the auditor’s report, the individual carrying out the audit to sign the report, and a separate template identifying specific rule breaches.

FSA client assets unit leader Richard Sutcliffe says: “We have seen serious failings in relation to auditors’ client assets reports. As a result we have referred a number of auditors to their relevant auditing bodies over the past year and are currently considering referring several other cases.

“Ultimately it is a firm’s responsibility to ensure they have adequate systems in place, but we rely on their auditors to provide some of the necessary independent assurance. These new rules make it crystal clear for firms what we require of their external auditors when it comes to producing high quality and consistent client assets reports.”

The rules will come into force on June 1, but firms and their auditors will have the option of not applying the new rules until September 29 to transition to the new rules.

If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing