Supervision of audit firms
In line with the two-tier system of supervision, the SFBC delegates responsibility for the auditing of banks, securities dealers, fund management companies, investment companies with variable capital, investment companies with fixed capital, limited partnerships for collective investments, asset managers of collective investments, representatives of foreign collective investment schemes and investment funds. It grants extensive authority to licensed audit firms which are under its supervision, with the result that the work of the audit firms is duly supervised and verified.
The International Monetary Fund has issued a recommendation proposing the development and implementation of a framework for monitoring the quality of the services provided by audit firms. The SFBC has followed up this recommendation, which coincided with political developments on both a national and international level, and also enabled it to incorporate past experiences into its considerations.
The supervision of audit firms authorised to conduct audits of banks, securities dealers, fund management companies, investment companies with variable capital, investment companies with fixed capital, limited partnerships for collective investments, asset managers of collective investments, representatives of foreign collective investment schemes and investment funds has been reinforced and expanded from 2002 onwards. In particular, a dedicated organisational unit was created to handle this aspect of the SFBC’s work. The unit’s primary function is to verify that audit firms meet the conditions of their accreditation at all times and comply with regulatory provisions and the relevant professional codes of conduct, and also to monitor the correct use of audit methods as set out in professional manuals and standards. It performs quality control tests on their organisational structures and the execution of their individual mandates and analyses the scope of their tasks and fees. It provides instruction on the procedures relating to the accreditation of audit firms and their auditors as well as those in connection with a change of audit firm.
The aim of audit firm supervision is to maintain a high level of quality in both the planning and execution of audit. It also aims to ensure that the content of the audit reports prepared for senior management, supervisory and controlling bodies as well as for the SFBC corresponds to the findings made during the audits. The use of multidisciplinary teams presents the opportunity to develop significant synergies between banking supervisory bodies, securities dealers, fund management companies, investment companies with variable capital, investment companies with fixed capital, limited partnerships for collective investments, asset managers of collective investments, representatives of foreign collective investment schemes, investment funds and that of audit firms. It also enables the SFBC to strengthen its links with audit firms and their auditors, set out its expectations with regard to audits and obtain important information.
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