Good practices for auditors of fund management companies
The Monetary Authority of Singapore (MAS) recently published an Information Paper that sets out good practices for auditors. These include:
1. Be Familiar with FMC Regulatory Requirements
A good practice for auditors of FMCs is to ensure thorough familiarity with the local regulatory requirements and frameworks. This includes changes which require timely notifications to MAS and financial reporting requirements.
During audits, auditors should actively verify that the FMC is in compliance with these regulations by reviewing its processes, procedures, and controls related to investor protection, risk management, and financial reporting.
2. Support FMCs in Adopting Strong Risk Management & Internal Controls
Auditors of FMCs should support the adoption of effective risk management practices and internal controls by helping identify and assess financial, operational, and regulatory risks. They should ensure the company’s risk management framework is robust and in line with industry standards, while evaluating internal controls to prevent fraud and ensure compliance.
3. Maintain Independence
Auditors should maintain independence by avoiding the provision of both internal and external audit services to the same FMC. This separation ensures objectivity and transparency, as it prevents conflicts of interest that could arise from the same firm being involved.
4. Ensure Financial Regulatory Returns are Prepared Correctly
Auditors should verify that the financial statements and regulatory returns reflect a true and fair view of the company’s financial position and ensure that any regulatory filings are submitted in a timely manner to the appropriate authorities. This may include scrutinizing how the FMC collects and consolidates financial data.
5. Report Regulatory Non-Compliance to MAS
In the event of regulatory non-compliance, auditors should promptly report the issue to MAS or advise the FMC to self-report, emphasizing the importance of full disclosure and accountability.
For more details on best practices for auditors of fund management firms, you can reach out to our APAC Compliance Solutions team.