The FSA has confirmed rules to improve the quality and consistency of auditors’ client assets reports.
The policy statement outlines 10 new requirements for firms and their external auditors.
This policy statement follows a review by the FSA’s specialist client asset unit into the quality and consistency of auditors’ client assets reports. A number of serious failings were identified including: auditors providing ‘clean’ reports despite firms committing serious breaches of client asset rules auditors’ reports covering the wrong chapters of the client asset sourcebook and auditors failing to provide adequate details on issues and exceptions identified in their report.
The failings indicated a general deficiency by auditors in applying the FSA requirements on client assets, prompting the steps the FSA has taken to improve the quality of auditors’ client assets reports.
Richard Sutcliffe, leader of the FSA’s client assets unit, said: “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.
