Annual Report 2016

Regulatory Audit | FAOA 2016
29
The following figures analyse, by
audit area and cause, findings from a
total of eleven file reviews, being
those completed in 2016 and those
of the prior year excluded from the
Activity Report 2015:
Figure 11
Number of regulatory audit file review comment form findings by audit area (45 findings in total)
Risk management 12
AMLA regulations 10
Internal control system, incl. IT 7
Audit planning, incl. risk analysis and audit strategy 4
Tied assets 2
Capital requirements and deposit protection 2
Conceptual separation financial and regulatory audit 2
Regulatory reporting 2
Use of the work of internal audit 1
Liquidity requirements 1
Other 2
The most common comment form
findings related to audit procedures
in the risk management area (particularly
the credit area). Findings on audit
procedures relating to compliance
with ALMA regulations were also
common. The latter also produced
many findings in the prior year. The
FAOA pays particular attention to the
proper audit of the ICS. Seven findings
arose in this area.
FINMA must be able to rely on the
quality of regulatory audit reporting
and planning in carrying out its oversight
activities. The FAOA therefore focuses
on the comprehensive, clear and
objective presentation of facts and
audit results. Attention is also paid to
proper audit planning. Six of the total
of 45 findings include deficiencies in
regulatory audit reporting or planning.
Of these, four relate to regulatory audit
engagements of different size and
financial market licence type, audited
by four different regulatory audit firms.
In one serious case an audit report was
provided to FINMA without evidence
that the audit procedures stipulated by
FINMA had been performed.
The main cause of comment form
findings was the failure to obtain sufficient
appropriate audit evidence, often
Figure 12
Causes of 2016 regulatory audit file review comment form findings
Insufficient audit evidence 19
Insufficient audit evidence combined with insufficient professional scepticism 12
Deficient regulatory reporting in conjunction with insufficient audit evidence 4
Other 4
Serious violation of auditor’s duty of care 2
Conceptual separation financial and regulatory audit 2
Inadequate audit planning 2
associated with insufficient professional
scepticism in planning and
performing the audit. This resulted
in inadequate regulatory reporting
to FINMA. Insufficiency of audit evidence
concerned sample testing, for
example, where sampling risk was not
reduced to an acceptably low level by
the size and testing of the sample.
2016 points of focus
The FAOA published its points of focus
for the 2016 regulatory audit inspections
in the 2015 Activity Report