Where an entity holds client assets the FCA's Supervisory Manual (SUP rules) require the CASS auditor, annually, to provide a Reasonable Assurance Client Assets Report and to report, among other things, on whether the entity has adequate systems in place to safeguard their client assets.  Where an investment business claims not to hold client assets, a Limited Assurance Report is required.

The Assurance Standard Providing Assurance on Client Assets to the Financial Conduct Authority has been developed to support and challenge auditors when providing these reports.  The proposed new Standard will contain requirements relating to: reasonable assurance engagements, limited assurance engagements, special reports and non-statutory client money trusts.

ICAS is supportive of the FRC proposal to issue a new Assurance Standard and comments that “the proposals will formalise the work already being undertaken by many firms preparing client asset reports”.  It also does not see that the proposed new Standard will lead to a compliance burden as many as many of its requirements are already required under existing professional and ethical standards”.

The full comment letter and responses raised to all questions in the invitation to comment is available on the ICAS website