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Remarks by the Chairman of the FSMA to the General Meeting of the IRAIF/IREFI

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News article
17/02/2020

The chairman of the FSMA, Jean-Paul Servais, spoke at the General Meeting of the Institut des Réviseurs Agréés pour les Institutions Financières/Instituut van de Revisoren Erkend voor de Financiële Instellingen (IRAIF/IREFI) on 3 February 2020.

During his remarks, the chairman emphasized the importance of the role of auditors in the smooth operation of the markets and for financial stability. He also reviewed the recent legal and regulatory changes intended to strengthen and better support their legal mandates.

He then described the new modes of collaboration by accredited auditors with the prudential supervision conducted by the FSMA. These new modes have also been set out in a circular (available in French and Dutch only). The circular clarifies the information that the FSMA expects from entities under supervision on the one hand, and from accredited auditors on the other, in particular as regards the new layout for annual reporting. The chairman also stressed the importance of the signal function, which should cover a much wider range of topics than the imminent dissolution of a company, and should include all information that is relevant from a prudential standpoint. Accredited auditors, as partners in prudential supervision, are expected to approach their preventive mission not only from a short-term perspective – as it the case for the certification of the annual accounts – but also from a medium and long-term perspective in order to fulfil the objectives of prudential supervision.

Lastly, the chairman commented on certain developments that pose challenges to the profession as a whole. He evoked technological changes and the increasing use of artificial intelligence and data analytics, as well as the changes in the regulatory and normative framework. In this regard, he also referred to developments at international level, which he is monitoring closely as vice-chairman of IOSCO and chair of the IFRS Foundation Monitoring Board. The Monitoring Board was created in 2009 with the aim of overseeing the IFRS Foundation, whose Trustees in turn exercise oversight over the IASB. The Monitoring Board consults regularly with the Trustees and the IASB chairman, with a view to reviewing the quality and effectiveness of the governance framework of the IFRS Foundation and thus to supervising the process by which the IFRSs are developed. The next meeting of the Monitoring Board will be held in February 2020 in Brussels, at the premises of the FSMA.