SWI FINMA is creating new supervisory audit regulation that takes over most of the previous content of Circular 2013/3 but no material change to current system made.
However, advocates investigation into legal basis of supervisory auditing with a view to improvements, in particular so-called direct mandates; explanatory note also issued.
In 2023, SWI FINMA carried out an ex-post evaluation of circular 2013/3 on auditing.
Based on the results it was clear there was no material need for adjustments to the supervisory auditing system given the current legal framework; it is now transferring most auditing rules previously contained in said circular to new SWI FINMA regulation.
Small part of content remains in a circular to enable more flexible and rapid adaptation of previous appendices; annexes, which mainly concern audit firms' standard audit strategy and risk analysis, are supervisory instruments and are becoming templates.
FINMA will ensure those affected i.e. institutions and auditing companies, will be able to comment on adjustments; flexibility fundamentally supported in ex-post evaluation.
This revision does not address potential for improvement in legal basis for supervisory auditing that was discussed in the context of dealing with the Credit Swisse crisis.
This applies in particular to direct mandate of audit firms by SWI FINMA to strengthen independence of auditing as recommended by IMF; it supports investigation into this.
Effectiveness
Consultation open until May 22, 2024; more information on the matter is provided.
In doing so it has fulfilled the requirement for the format compliance of auditing regulation under art 7, para 1, of the Financial Market Supervision Act (FINMASA).
SWI FINMA has transferred the majority of the rules on auditing that were previously set out in Circular 2013/3 on Auditing to the new Regulatory Auditing Ordinance.
Circular's previous annexes re risk analysis, audit strategy will now become templates.
Both the new ordinance and the revised circular enter into force on Jan. 1, 2025.
