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FAIS Act FAIS Act and Subordinate Legislation
While auditing an FSP, the auditor discovers that money in the separate client account has been used to pay the FSP's rent, and considers this material. What does the FAIS Act require of the auditor?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) To resign the appointment, since an auditor may not act for a non-compliant FSP.
- b) To report the irregularity in writing to the Authority.Correct
- c) To resolve the matter with the FSP and mention it only in the next audit.
- d) To report the irregularity to the FAIS Ombud for a determination.
Why this is the answer
An auditor of an FSP must report to and inform the Authority in writing of any irregularity or suspected irregularity in the conduct or affairs of the FSP of which the auditor became aware in performing the audit and which the auditor considers material. The Ombud deals with client complaints, and neither silence nor resignation discharges the duty.
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