The UK Financial Conduct Authority (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, the regulator explains. 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 four client assets reports (relating to two 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.
