Swiss audit oversight in the international context

Transcription

1 International Auditing Conference with third countries Better cooperation between public oversight systems Swiss audit oversight in the international context Frank Schneider, Executive Director FAOA

2 Swiss audit oversight system Chronology of independent audit oversight in Switzerland September 2007 January 2008 April 2008 Audit Oversight Act (AOA) comes into force FAOA starts its operational activities Revised Company Law comes into force different levels of audit are introduced (limited vs. ordinary audit) FAOA begins its inspection activities for PIE s Why did the Swiss legislator create the FAOA? Self-regulation of the profession outdated Improve audit quality International developments (SOX USA / 8th EU-Directive) 2

3 Swiss audit oversight in the international context Globalisation of capital markets and public interest entities Changing organizational structures of audit firms towards an increasing integration Deloitte Switzerland: 100% affiliate of Deloitte LLP (UK) KPMG Switzerland: merged with the international member firms in Germany, the United Kingdom and Spain to form KPMG Europe LLP, effective as of 1 October 2008 Ernst & Young Schweiz: Swiss Ernst & Young partners overwhelmingly approved the creation of a single EMEIA Area in June 2008 PwC: With effect from 1 October 2008, the global network will be subdivided into three geographical clusters: West, Central and East. 3

4 Swiss audit oversight in the international context Number of audited listed entities per audit firm under state oversight: 1 Data according the self declaration of the audit firms under state oversight. As of July 29, 2007 the basic set are 476 publicly traded companies. KPMG also comprises the companies audited by KPMG Klynfeld Peat Marwick GoerdelerSA. 4

5 Swiss audit oversight in the international context Multilateral level FAOA is a member of the International Forum of Independent Audit Regulators (IFIAR : Bilateral level Art. 8 AOA: rules for the implementation of a system of mutual recognition for companies operating internationally Art. 26 AOA: rules for cooperation with/transfer of information to foreign oversight authorities Art. 27 AOA: rules for cross-border oversight activities 5

6 Registration/oversight of third country auditors Third country audit firm is subject to oversight by a recognized foreign oversight authority Only minimal registration with the FAOA No direct oversight by the FAOA Full recognition of inspection activities undertaken by the foreign oversight authority Transmission of inspection reports only if deemed necessary Exceptional transmission of audit work papers Registration/oversight arrangements for third country auditors will come into force once the main partner oversight authorities have been recognized by the FAOA/Swiss Government No need for a transitional period 6

7 Mutual recognition process Conditions for mutual recognition Equivalence of the foreign oversight system Principle based approach In principle no joint inspections to assess equivalence Authority complies with requirements for cooperation (Art. 26/27 AOA) Possibility to rely on assessments done by other authorities Reciprocity Swiss FAOA has not started mutual recognition assessments yet 7

8 Cooperation and joint inspections Transfer of confidential information Foreign authority uses information received exclusively for the direct oversight of persons and firms that provide audit services Foreign authority is bound by official or professional secrecy Information received can only be passed on to authorities and bodies that carry out oversight duties that are in the public interest and are bound by official and professional secrecy, on the basis of authorization in a treaty or with the prior consent of the FAOA Joint inspections Compliance with the conditions mentioned before Requesting state must grant reciprocity Based on an authorization in a treaty or with prior consent of the oversight authority 8