The approved company auditor’s mission in relation to investment firms
 

The role of the réviseur d'entreprises agréé in relation to investment firms is fully set out in CSSF circular 03/113 as amended by CSSF circular 10/486 and supplemented by CSSF circular 13/571.

These circulars define, in general, the role and mission of the réviseur d’entreprises agréé as regards of the statutory audit of the annual accounts, and more specifically, they stipulate the subjects that must be analysed in the analytical audit report.

Report on the annual accounts
 

The annual accounts must be audited in accordance with International Standards on Auditing (ISAs) published by the International Federation of Accountants (IFAC), adapted or completed as required by national legislation or practices.

Audit work and compliance with legal and prudential provisions
 

The audit must encompass all areas of the investment firm, i.e. balance sheet and off-balance sheet operations.

It must cover all branches abroad and all of the investment firm’s foreign subsidiaries for the purpose of monitoring compliance with Luxembourg’s anti-money laundering standards and rules of conduct, in particular.

Annual analytical audit report

The report must include the following sections:

1. Mandate
2. Significant events
3. Organisation and administration
4. Activities and analysis of related risks
5. Scheduled reporting to the CSSF
6. Prudential ratios
7. Analysis of the annual accounts
8. Professional anti-money laundering and
anti-terrorism financing obligations
9. Professional obligations in respect of rules
of conduct
10. Branches
11. Relations with affiliated undertakings
12. Monitoring of problems raised in previous
reports
13. General conclusion

Consolidated analytical audit report
 

The consolidated analytical audit report must be drawn up in accordance with the same principles and framework as the annual audit report. It does, however, focus on information specific to the consolidated reporting entity.

The consolidated analytical audit report must explain the scope of consolidation in detail and any changes that have occurred in the scope during the year under review, together with the list of interests that are not included within the consolidated report, with the reasons for such exclusion. For each consolidated entity, the method of consolidation must be specified.

If an investment firm subject to CSSF consolidated supervision is exempt from publishing consolidated accounts or when the scope of consolidation of the consolidated accounts published differs from the scope of consolidated supervision, the consolidated analytical audit report must be based on the consolidated accounting situation corresponding to the scope of consolidated supervision performed by the CSSF. The consolidated analytical audit report briefly sets out the various points in the framework for each consolidated subsidiary.

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The réviseur d’entreprises agréé’s mission in relation to specialised and support PSF
 

There is not (yet) any circular dedicated to the mission of the réviseur d’entreprises agréé in relation to specialised and support PSF. For both specialised and support PSF, the réviseur d’entreprises agréé must, however, certify in a compliance report that the entity complies with professional anti-money laundering obligations and rules of conduct.

For support PSF and following the issuance of CSSF circular 12/544, a new circular is expected to be issued soon, defining the practical rules of the réviseurs d’entreprises agréés’ mission as regards support PSF and the content of the agreed-upon procedures report on findings.

The réviseur d’entreprises agréé also issues a letter of recommendation once a year to the board of directors, which the latter forwards to the CSSF. This letter contains the observations relating particularly to compliance with laws and circulars applicable to the PSF. The réviseur d’entreprises agréé considers:

• Compliance with part II of the Law and the provisions laid down by CSSF regulation 12-02 on the fight against money laundering and terrorist financing
• Article 36-1 of the Law
• CSSF circular 95/120 on central administration
• CSSF circular 96/126 on administrative organisation and accounting procedures
• CSSF circular 98/143 on internal control, as amended
• CSSF circulars 01/47 and 01/29 applicable to company administrators, if relevant
• CSSF circulars 05/178 and 06/240 relating to administrative organisation and accounting procedures and IT outsourcing 

and reports significant deficiencies in the letter of recommendation attached to the compliance report.

Lastly, the réviseur d’entreprises agréé is required by law to promptly report to the CSSF any serious facts discovered during the audit.

The réviseur d’entreprises agréé’s mission in relation to branches of PSF
 

For the purpose of the task of auditing accounts, the réviseur d’entreprises agréé must, in certain cases, express an opinion on the PSF’s branches. The réviseur d’entreprises agréé’s mission depends primarily on the nationality of the PSF’s branch.

Non-European branches

Whatever the type of PSF chosen, the réviseur d’entreprises agréé must assess compliance with regulatory provisions concerning:

1. The central administrative office of the branch
2. The branch organisation
3. Internal branch supervision and internal audit
4. The branch’s IT organisation and subcontracting
5. The financial information to be reported on a regular basis to the CSSF by PSF
6. Anti-money laundering and combating terrorist financing within the branch

In the analytical audit report drafted for investment firms only, the registered company auditor must include an assessment of branches concerning:

1. Compliance with regulations relating to asset managers, as applicable
2. Compliance with regulations on consolidated supervision
3. The Compliance function
4. Compliance with regulations relating to rules of conduct in the financial sector (MiFID)
5. The calculation of significant exposures

European branches

The réviseur d’entreprises agréé’s task is less extensive for European branches owing to the fact that they are subject to equivalent rules as those in force in Luxembourg.

The réviseur d’entreprises agréé must nonetheless ensure that European branches of investment firm PSF comply with regulations on rules of conduct in the financial sector (MiFID) and comply with regulations on combating money-laundering and terrorist financing within the branch, irrespective of the category of PSF.

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