Today the Swiss Financial Market Supervisory Authority is putting forward its definitive circulars on "Auditing" and "Audit firms and lead auditors", both of which provide a basis for the reorientation of regulations on auditing. The circulars will come into force on 1 January 2013.
Acting as FINMA's extended arm, audit firms play an important role in the Swiss regulatory approach. Both circulars published today serve to realise FINMA's objective which is to further enhance cooperation with audit firms and align their duties more effectively with FINMA's specific supervisory goals.
Numerous reactions to the consultation
The consultation drafts of both circulars drew a great response. The goals pursued by FINMA to re-orientate auditing were in principle supported by most of the respondents. Any changes proposed mainly concerned risk analysis, separating financial audits from regulatory audits, the role of internal audits, reporting, licensing prerequisites for audit firms and lead auditors, and impartiality requirements.
Overview of the most important changes
FINMA studied the comments received carefully and made numerous changes to the consultation drafts. The most important changes are:
- Transitional provisions: to ensure a smooth introduction of the circulars, transitional provisions have been put in place that take the needs of the individual supervisory areas into account.
- Risk analysis: one of the most significant new requirements for audit firms is the risk analyses of the companies audited. FINMA's expectations with respect to risk analysis are specified in the definitive circulars.
- Auditing standards: those used in regulatory audits have been extended, listed separately and explained. This involves principle-based regulations which have been formulated in line with selected Swiss audit standards suitable for the purposes of supervisory audits.
- Separating financial audits from regulatory audits: where appropriate, audit firms may refer to the results of financial audits for supervisory audits.
- Role of internal audits: while conducting supervisory audits, audit firms may, under certain conditions, refer to facts established during the internal audits of the companies supervised. In any event, the audit firms are responsible for the audit and must submit their audit opinion.
Both circulars "Auditing" and "Audit firms and lead auditors" will enter into force on 1 January 2013. They will replace FINMA Circular 2008/41 ("Audit matters") and the circulars issued by FINMA's predecessor authorities.
Tobias Lux, Media Spokesperson, phone +41 (0)31 327 91 71, firstname.lastname@example.org