Good practices for auditors of fund management companies

      Auditors are a key stakeholder when promoting strong internal controls, risk management practices and business conduct by Fund Management Companies (FMCs).

      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.

      Contact us

      Previous post Next post
      Share

      More like this

      Timeline confirmed for Singapore to repeal Registered Fund Management Companies regime

      The Monetary Authority of Singapore (MAS) have announced the repeal of the regulatory regime for Registered Fund Management Companies (RFMCs)…
      Read more

      Regulatory Compliance Updates March 2024 – APAC Region

      This APAC regulatory update includes – Prevention of Money Laundering and Countering the Financing of Terrorism.
      Read more

      Latest updates from MAS on Anti-Money Laundering - what you need to know

      The Monetary Authority of Singapore (MAS) views Anti-Money Laundering (AML) as a critical component of its regulatory framework, aimed at…
      Read more

      Regulatory Compliance Updates February 2024 – APAC Region

      This APAC regulatory update includes – Guidelines on Licensing, Registration and Conduct of Business for Fund Management Companies.
      Read more

      New location for Waystone’s Singapore operation as demand for its services continues to grow

      Waystone has moved its Singapore operation to a new, central location in the heart of the financial district. In a…
      Read more

      MAS responds to feedback on proposals to mandate reference checks for financial industry

      The Monetary Authority of Singapore (MAS) has officially published its response to the feedback received on its proposals to mandate…
      Read more