FSA ‘disappointed’ by auditing standards

28 September 2010

The “quality and consistency” of standards surrounding audit reporting is disappointing, the Financial Services Authority (FSA) has claimed.

According to the body, a review into auditing practices found that many firms and organisations failed to meet the FSA requirements when evaluating their client assets.

In a review of the industry, the regulator found numerous issues including how many auditors were unaware of reporting requirements while a number of reports have been submitted late or contained errors such as incorrect dates or without any signatures.

Richard Sutcliffe, FSA’s client assets sector leader, said: “We have also made clear our disappointment in the quality of auditors’ reports that we have reviewed.

“It is ultimately a firm’s responsibility to ensure that they have adequate systems in place, but they, as we, rely on their auditors to provide the necessary assurance in this regard. Auditors charge a fee for this professional service - it is important that we and firms can rely on the reports they are signing off.”

As a result of the review, the FSA has issued a consultation paper containing proposals to ensure improvements to auditing sector standards.

Recommendations included ensuring reports are consistent and confirming the standards that firms need to adhere to.

By Jim Ottewill

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