We are auditors (under Co's Act) of an FSA regulated company.
As part of our audit programme we wish to examine a sample of client files as a test on completeness of income. The director is refusing on the grounds of client confidentiality. We have never had access refused before by other similar clients. Is the director correct in his assertion? How else can we test completeness of income?
We are concerned that we may have to qualify.
The FSA rulebook states that the IFA has to provide the information requested by its auditors.
Any advice gratefully received.
knuckles
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Gently point out his obligations
Produce the part of the FSA rulebook that says he has a duty to do this. Then show him the letter of engagement which outlines client confidentiality. Then show him your association's ethics guidelines around client information and maintaining confidentiality.
Next, explain why you need to see them and what the consequences of not being granted access could be. If that doesn't do it, explain the consequences of qualifying your report.
If that doesn't do it, I'd qualify as there is clearly something to hide at that point.