The FCA has censured the auditor Macintyre Hudson LLP (MHA) for failing to prepare client assets reports to the required standard.
MHA failed to notify the FCA of rule breaches by firms it had audited, which could have put customers’ money at risk.
Client asset protection is a key part of maintaining market confidence, financial stability and consumer protection. Firms that hold client assets are required to have an auditor provide a client assets report to the FCA on an annual basis except in limited circumstances. The FCA relies on the accuracy of these client assets reports to monitor whether firms are complying with its rules, so it is important that auditors ensure their reporting is accurate.
The FCA’s investigation found that between 2015 and 2019, MHA failed to prepare 4 client assets reports (relating to 2 firms) to the required standard. It failed to report 25 breaches of the rules by firms it had audited. These ranged from failings in documentation, to firm’s assets being held alongside client assets.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said:
‘In a first of its kind, this censure underscores the important role that auditors play in providing accurate reports on whether firms are complying with our rules.
‘This information helps us to safeguard customer funds and reduce the harm caused by firm failures. We expect all firms to ensure that they’re providing full and accurate reports.’
