New audit standard for assurance on client assets being presented to the FCA
THE FINANCIAL Reporting Council (FRC) has published its audit standard to provide assurance on client assets to the Financial Conduct Authority (FCA).
Its Providing Assurance on Client Assets to the Financial Conduct Authority standard covers the work auditors do when reporting to the FCA on compliance by financial services firms, with the FCA’s own Client Asset (CASS) rules. The rules cover the safekeeping of client assets and monies managed by some 1,500 firms holding over £100bn in assets and £11trn of other custody assets.
Melanie McLaren, FRC’s executive director of codes and standards, said: “The effective safekeeping of client assets is an issue of significant public interest. Our Assurance standard will support auditors in providing high quality assurance over the control systems operated by regulated firms and will support auditor reporting to the FCA.”
The development of the standard, which will apply to periods starting on or after 1 January 2016, has been supported by the FCA.
The accounting and audit watchdog said the FCA had recently strengthened its own client asset regime while the FRC’s standard would “help ensure that the strengthened regime is underpinned by sound assurance”.
The final standard has been published following earlier consultation alongside a feedback statement and impact assessment.