FRC publishes exposure draft to provide assurance on Client Assets
News types: Consultation Announcement
Published: 14 May 2015
The Financial Reporting Council (FRC) has today issued an exposure draft, Providing Assurance on Client Assets to the Financial Conduct Authority, for consultation. The Assurance Standard has been developed to support and challenge auditors when reporting on compliance, by regulated firms, with the Financial Conduct Authority’s (FCA’s) Client Asset (CASS) rules designed to ensure the effective safekeeping of client assets and client monies. More than 1,500 firms hold more than £100 billion of client assets and £11 trillion of other custody assets.
The FCA has identified issues with the compliance of some firms and has strengthened its client asset regime. The proposed Assurance Standard will help ensure that the strengthened regime is underpinned by sound assurance where regulated firms fail to maintain the control regime required by the FCA’s rules, auditors will report these failings to the FCA.
Melanie Mclaren, Executive Director of Codes and Standards said:
“The effective safekeeping of client assets is an issue of significant public interest. Our proposed 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 where regulated firms fail to fulfil their obligations.
The development of the Standard for consultation has been supported by the FCA. I encourage audit practitioners, regulated firms, investors and other interested stakeholders to read the draft, and to provide us with their views.”
The comment period on this proposal ends on 31 July 2015. Subject to consultation, the Standard would apply to periods commencing on or after 1 January 2016.
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