Regulatory return audit to be a matter of risk

Routine audit of regulatory returns is set to become contingent on risk if proposals in CP07/15 are accepted. Under a risk-based approach the FSA would retain the requirement only for insurers and credit unions. Any authorised firm could be directed to provide a skilled persons report, termed a ‘section 166 Return Assurance Report’, in order to give assurance about the quality of the return. Thematic supervisory reviews would also examine regulatory returns and the FSA would further rely on firms’ internal audit functions to confirm their validity.