FUNDS 16.3 FUNDS 16.3 Auditors of a Fund
Guidance1. Rule 11.1.2 requires every Domestic Fund to have an auditor appointed to it in accordance with Section 189 of the FSMR and any Rules made for the purposes of that Part.
Appointment and termination of auditors
A Fund Manager must:(a) notify the Regulator of the appointment of an auditor to the Fund by completing and submitting the appropriate form (which shall be in such form as the Regulator may prescribe); and(b) prior to the appointment of the auditor, take reasonable steps to ensure that the auditor has the required skills, resources and experience to audit the type of Fund for which the auditor has been appointed.
A Fund Manager must notify the Regulator immediately if the appointment of the auditor is or is about to be terminated, or on the resignation of the Fund's auditor, by completing and submitting the appropriate form (which shall be in such form as the Regulator may prescribe).
A Fund Manager must appoint an auditor to fill any vacancy in the office of auditor and ensure that the replacement auditor can take up office at the time the vacancy arises or as soon as reasonably practicable.
FUNDS 16.3.4 FUNDS 16.3.4(1) A Fund Manager must take reasonable steps to ensure that the auditor and the relevant audit staff of the auditor are independent of, and not subject to, any conflict of interest with respect to the Fund Manager, the Trustee or the Fund.(2) A Fund Manager or Trustee must notify the Regulator if it becomes aware, or has reason to believe, that the auditor or the relevant audit staff of the auditor are no longer independent of the Fund Manager, the Trustee or the Fund, or have a conflict of interest which may affect their judgement in respect of the Fund.
Guidance1. A Fund Manager should consider whether there is any financial or personal relationship between it or any of its relevant Employees and the auditor or any of the relevant Employees of the auditor that may affect the judgement of the auditor when conducting an audit of the Fund or complying with all its legal obligations, including the FSMR, GEN, AML and other relevant Rulebooks made by the Regulator.
Amended on (3 February, 2020).
Co-operation with auditors
A Fund Manager must take reasonable steps to ensure that it and its Employees:(a) provide any information to its auditor that its auditor reasonably requires, or is entitled to receive as auditor;(b) give the auditor right of access at all reasonable times to relevant records and information within its possession;(c) allow the auditor to make copies of any records or information referred to in (b);(d) do not interfere with the auditor's ability to discharge its duties;(e) report to the auditor any matter which may significantly affect the financial position of the Fund; and(f) provide such other assistance as the auditor may reasonably request it to provide.
A Trustee must take reasonable steps to ensure that it and its Employees act in compliance with Rule 16.3.5(a)–(f).
A Fund Manager must, in writing, require any Person to whom the Fund Manager has delegated or outsourced any functions to co-operate with the Fund's auditor in accordance with the provisions specified in Rule 16.3.5.
Function of the Auditor
A Fund Manager must, in writing, require its auditor to:(a) conduct an audit of the Fund's financial statements in accordance with the requirements of the relevant standards published by the International Auditing and Assurance Standards Board (IAASB); and(b) produce a Fund Auditor's Report on the audited financial statements in accordance with GEN Rule 6.6.8.
FUNDS 16.3.9 FUNDS 16.3.9
The requirements in Rules 16.3.8 and 16.4.5(a) for financial statements to be audited and for a Fund Auditor's Report to be produced may be waived by the Regulator, on a case-by-case basis in relation to Exempt Funds and Qualified Investor Funds where the Fund Manager has obtained a Special Resolution of Unitholders in support of such a waiver.
Circumstances in which it may be appropriate for Fund Managers to seek the waiver described in Rule 16.3.9 include:(a) where the Fund is being wound up; or(b) where the Fund holds only a small number of illiquid assets.