IOSCO published a report from the Monitoring Group on recommendations to strengthen the international audit and ethics standard-setting system. The Monitoring Group members include regulatory bodies committed to advancing the public interest in international audit-related standard-setting and audit quality such as BCBS, EC, FSB, IAIS, International Forum of Independent Audit Regulators, and IOSCO. The recommendations in the report are organized to consider issues related to accountability, public interest oversight, and governance; the purpose, structure, and process of standard-setting; funding; and transition. The Monitoring Group recommends that all levels of the governance and oversight framework should be subject to transparent accountability processes, including regular effectiveness reviews and enhanced reporting in the public domain.
The future structure, governance, process of standard-setting, and funding goals of the international audit and ethics standard-setting system as outlined in the recommendations represent significant enhancements to the current structure. These key enhancements to the current structure will strengthen the standard-setting process, which should result in standards that are more responsive to the public interest and in turn lead to improved audit quality. The recommendations are designed to
- Achieve an independent and inclusive, multi-stakeholder standard-setting system.
- Reinforce the consideration of the public interest in the standard-setting process and throughout the full cycle of standards development, with enhanced independent oversight and standard-setting guided by the Public Interest Framework.
- Foster the development of timely, high-quality standards that respond to an accelerating pace of change.
The Monitoring Group envisages that a transition plan will be established within the next nine months and that the recommendations will be implemented within three years thereafter. Under the recommendations, the Public Interest Oversight Board (PIOB) will continue to have the critical role of providing independent oversight of the public interest responsiveness of audit and ethics standard-setting. The Monitoring Group intends to provide a formal link between the PIOB and public authorities to protect the PIOB from undue influence while enhancing its public accountability.
Keywords: International, Accounting, Banking, Insurance, Recommendations, Governance, Standard Setting, Audits and Ethics, Monitoring Group, IOSCO, IAIS, BCBS
Previous ArticleHKMA Plans to Consult on Revisions to CVA Framework Later This Year
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.
EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.
EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.
PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.
MAS published a statement guidance on dividend distribution by banks.
APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.
FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.
EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.
SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.