The UK Financial Services Authority (FSA) has issued a
consultation paper proposing improvements to auditors’ reports on
client assets. The proposal comes after a number of failings were
identified in submitted reports.
The consultation paper sets out 10 proposals that aim to drive
improvements in the quality and consistency of auditors’ reports on
client assets.

The improvements attempt to confirm and
clarify the standards required in order to provide a clear focus of
accountability and increase consistency of information.

The consultation paper also aims to improve a
firm’s governance of auditors and compliance with client assets

The FSA’s client assets sector leader Richard
Sutcliffe said the regulator is disappointed in the quality of
auditors’ reports reviewed and that firms should make sure they
have adequate systems in place to provide the necessary

“The actions we have taken recently along with
the changes we are consulting on will significantly strengthen the
requirements in this regard and also mean that should we fail to
see improvements we will be able to take action more easily,”
Sutcliffe said.

The consultation period closes on 31 December
2010. The FSA intends to publish a policy statement during the
first quarter of 2011.