Annual Report 2016

34
International | FAOA 2016
IFIAR is an important platform for
disseminating knowledge and exchanging
practical experiences with
respect to the market environment,
and for promoting cooperation and
exchanges between audit oversight
authorities of various jurisdictions.
The CEO of the FAOA remained IFIAR
Treasurer in 2016.
The plenary meeting was held in London
in April 2016. IFIAR members
most particularly approved the establishment
of a permanent secretariat
in Tokyo, Japan, that is expected to
commence operations in April 2017.
During 2016 IFIAR also started an
advisory group, comprising of senior
investor and audit committee representatives.
Besides this, IFIAR issued
a reference guide for non-member
states on the establishment of independent
audit oversight systems.
The FAOA remained active in many
IFIAR working groups:
− International Cooperation Working
Group (ICWG): This working
group concerns itself with cooperation
and the exchange of information
between IFIAR members.
The FAOA took part in the
examination of MMoU entry candidates
(see below).
− Inspection Workshop Working
Group (IWWG): The aim of this
working group and the annual
workshop it organises is to provide
inspectors with a forum to
exchange ideas and discuss current
audit-related questions. The FAOA
took part in the 2016 workshop
in Abu Dhabi in the United Arab
Emirates and made a number of
presentations.
− Enforcement Working Group
(EWG): This working group dedicates
itself to issues relating to
the enforcement of applicable
standards in individual countries
through the use of legal sanctions.
The FAOA currently chairs
an EWG sub-group that is preparing
a survey on existing sanction
instruments.
Multilateral Memorandum of
Understanding (MMoU)
The aim of the MMoU is to promote,
in accordance with respective national
laws, the exchange of confidential
information among its signatories in
the areas of licensing, oversight, inspections
and disciplinary investigations.
Since the MMoU was approved,
the FAOA has taken part from within
the ICWG in the assessment of entry
applications. The administrative assistance
structures of each candidate
are examined closely in doing so. The
MMoU is to be signed at the Tokyo
IFIAR plenary meeting in April 2017.
Committee of European Audit
Oversight Bodies (CEAOB)
The CEAOB was formed recently in
response to the enactment of the
EU audit reform (see «Relations with
the European Union» above). It replaces
the European Group of Auditors’
Oversight Bodies (EGAOB) and
creates a new framework for cooperation
amongst EU national audit
oversight bodies. The CEAOB is made
up of senior representatives from the
responsible member state authorities
and the European Securities and
Marketing Authority (ESMA). It is currently
chaired by the German Auditor
Oversight Body (AOB). The CEAOB
can issue guidelines or non-binding
opinions to implement the regulation
and fulfil its duties. It also promotes
the exchange of information and the
dissemination of expert knowledge,
advises the EU Commission and
supports assessments and technical
inspections.
The Rules of Procedure of the CEA-
OB allow an audit oversight authority
from outside the EU and EEA to be
invited as an observer, subject to the
agreement of the members. The observer
status carries no voting rights.
The FAOA was neither a member nor
an observer at the EGAOB. The FAOA
will also not seek observer status at the
new body as Switzerland is not an EU
member state and the importance of
CEAOB within the EU will be primarily
political. However, the CEAOB has
formed various sub-groups that look
at specific questions. The «inspections
sub-group» is especially interesting to
the FAOA. This working group is responsible
for the exchange of information,
the dissemination of expert
knowledge and the propagation of
best practices in the inspection area. It
is the successor of the European Audit
Inspection Group (EAIG), in which the
FAOA had observer status. Participation
in the EAIG was of great value to
the FAOA as the representatives of the
EU member state oversight authorities
are not only active in the same markets
and operate under similar judicial
systems but also supervise the same
audit firms. The CEAOB granted observer
status to the FAOA with its resolution
of 25 November 2016.
Colleges of supervisors
The European-level integration of
various audit network country firms
had already led to the formation of
«colleges of supervisors» from the
regulatory side several years ago. This
concept was adopted within the EU
audit reform (see section „Relations
with the European Union« above).
The modalities for cooperation between
the responsible authorities of
EU member states also provide for
the creation of colleges of supervisors
and the mutual delegation of tasks.
The colleges deal with questions regarding
quality assurance, investigations
and inspections of audit firms
that provide audit services to PIE.
As the FAOA cannot exchange confidential
information about domestic
inspections to the same extent as EU
member states, it has given up its association
with these colleges. Whether
the FAOA can collaborate with
them in the future depends, amongst
other things, on the operational rules
they establish.