The Mutual Fund Dealers Association of Canada (MFDA) has found various issues with the work of external auditors that are overseeing dealers’ books, the self-regulatory organization (SRO) said Monday.
An MFDA bulletin sets out the deficiencies uncovered in the SRO’s review of the working papers of auditors that examine the books of fund dealers. The MFDA indicates that these issues were uncovered in its staff’s review of the auditors’ work for the four-year period ended Dec. 31, 2015.
The bulletin aims to “enhance awareness and understanding of the special audit requirements for external auditors” that carry out financial audits of MFDA firms.
According to the MFDA bulletin, the review found audit papers that lacked documentation on whether auditors: reviewed the controls and procedures of dealers’ accounting and back office trading systems; accounted for all of the securities that are in the physical possession of the dealer; and tested to ensure the margin and capital requirements used to determine a dealer’s capital requirements are being properly calculated.
All of the issues reported in the bulletin have been addressed with the auditors involved, the MFDA says in the bulletin.