ICAEW REP 49/06
CP 06/11 INTEGRATED REGULATORY REPORTING: CREDIT INSTITUTIONS AND CERTAIN INVESTMENT FIRMS
Memorandum of comment submitted in September 2006 by the Institute of Chartered Accountants in England and Wales to the Financial Services Authority’s consultation paper ‘CP 06/11 Integrated Regulatory Reporting: Credit Institutions and Certain Investment Firms’ issued in May 2006.
Contents Introduction Major Comments Points of Detail
Paragraph 1 3 11 2 10 16
INTRODUCTION 1. The Institute of Chartered Accountants in England and Wales (‘ICAEW’) welcomes the opportunity to respond to the FSA on its Consultation Paper 06/11 ‘Integrated Regulatory Reporting: Credit institutions and certain investment firms’. Our comments relate to the proposals in Chapter 12 on the auditor reporting requirements. The ICAEW is the largest accountancy body in Europe, with over 128,000 members operating in business, public practice and within the investor community. The Institute operates under a Royal Charter, working in the public interest.
MAJOR COMMENTS Approach lacks consistency 3. We support the proposal to remove the requirement for auditors to report on regulatory returns for firms falling under the Prudential sourcebook for banks, buildings societies and investment firms (‘BIPRU firms’). This brings the requirements for these firms into line with the existing auditor reporting requirements for banks thereby bringing consistency across firms subject to the Capital Requirements Directive. However, the proposal creates an inconsistency between the auditor reporting requirements of BIPRU and nonBIPRU investment firms. This difference in approach is incongruous with the FSA objective of risk based regulation, since BIPRU firms are generally considered to be of higher risk than non-BIPRU firms. We note that the FSA intends to conduct a review of the audit requirements of regulated firms in 2007 and that any decision on the removal...