Activity Report 2015

Regulatory Audit | FAOA 2015
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Regulatory Audit
Introduction
The bundling submission amendments
to the AOA and AOO have
been in force since 1 January 2015.
Since then, the oversight authority of
the FAOA has included all financial
and regulatory audit services provided
to PIE.
Unaffected by the bundling submission,
regulatory audit firms and regulatory
auditors-in-charge play a decisive
role in the Swiss dualistic financial
market supervision system. As the extended
arm of FINMA they perform
the regulatory audits of those supervised
by FINMA. Their audit responsibilities
go beyond those of the statutory
auditor. Regulatory audit firms and
regulatory auditors-in-charge must
therefore fulfill demanding licensing
requirements.
With the transfer of responsibility
for the oversight of regulatory audit
firms and regulatory auditors-in-charge
to the FAOA, the organisational
structure of the FAOA was extended
to include a regulatory audit department.
The organisational separation
of financial and regulatory audit
mirrors the fundamental separation
of financial and regulatory audit engagements
at audited clients. Despite
the formal separation of financial and
regulatory audit, duplication is minimised
as far as possible. Through key
account management it is ensured
that each state-regulated audit firm
has one main FAOA point of contact.
Cooperation with FINMA
The regulatory audit requirements of
FINMA, under financial market laws,
are closely related to financial audit
principles and standards. FINMA
therefore sets the regulatory audit
standards for regulatory audit firms.
These are to be complied with while
performing regulatory audit services.
FINMA is furthermore responsible for
the interpretation of the special accounting
standards within financial
market laws that apply to the statutory
and consolidated financial statements
of banks, securities traders and
collective investment schemes. In this
regard, FINMA issues relevant circulars,
if required. In connection with
the regulatory audit, FINMA has additionally
issued its own requirements
concerning incompatible activities.
Prior to an FAOA inspection there is
an informal exchange with FINMA.
The information needed by the FAOA
for file selection and for performing
the file reviews is exchanged. The
FAOA informs FINMA of the results of
the firm and file reviews by providing
a copy of the final inspection report,
which includes the comment forms
relating to the regulatory audit.
2015 inspections
Eight regulatory audit firms were inspected
in 2015, including:
− The five that are subject to an annual
inspection cycle because they
audit more than 50 PIE,
− one of five audit firms that is subject
to inspection at least once
every three years, and
− two of a total of eight pure DSFI regulatory
audit firms that are inspected
at least once every five years.
Audit quality at the eight firms inspected
in 2015 was assessed on the
basis of 18 file reviews. The following
categories of financial market companies
were selected:
− Eight banks, including two systemically
relevant banks, three cantonal
banks, a foreign-controlled bank
and two further banks,
− a securities trader,
− two insurers,
− an asset manager,
− a deposit bank,
− a fund manager, as well as the collective
investment scheme administered
by the manager,
− four DSFI.