Press Releases
Release Date: October 8, 2007
Contact:
Katrina Keller, (646) 637-9281, kkeller@sifma.org
SIFMA Issues Recommended Control Objectives for Asset Managers’ SAS 70 Reports
New York, NY, October
8, 2007 – The Asset Management Group (AMG) of the Securities Industry and
Financial Markets Association (SIFMA) today issued recommended
baseline areas of scope and control objectives for asset managers’ SAS 70
reports. SAS 70 reports, which are issued
in accordance with guidance from the American
Institute of Certified Public Accountants to demonstrate that a firm has appropriate
internal controls, are typically requested by the customers of asset managers,
such as pension funds and mutual funds.
The recommended asset
manager baseline areas of scope and control objectives include asset
management operations and the IT general
computer controls and were developed to make the audit reports more
understandable and provide a more consistent reporting model for the industry.
“Asset managers
have been utilizing SAS 70 to meet client requests, help support the
requirements of Sarbanes-Oxley and, to a certain extent, to meet the
requirements of Rule 38A-1, the rule defining the responsibilities of the chief
compliance officer. Prior to this project, the scope of activities or controls
that managers include in these reports has been all over the map,” said Joan
Binstock, partner of Lord Abbett and chair of SIFMA’s SAS 70 working group. “Setting
a recommended baseline on behalf of the asset managers sets a leading practice
for our industry.”
AMG members worked for almost two years to develop the new standards in conjunction with members of the asset management community as well as with the four major accounting firms (Deloitte & Touche, KPMG, Ernst & Young and PricewaterhouseCoopers), who have supported SIFMA’s recommendations.
The recommended baseline of essential control objectives includes a summary of the current landscape for SAS 70, laying out both the responsibilities for the asset manager and the auditor and also distinguishing between Type 1 and Type 2 SAS 70 reports. These reports are particularly important in light of Sarbanes-Oxley regulations, which call for an annual assertion that internal controls over financial reporting are effective. A well-executed SAS 70 audit report can be a useful tool for firms that also need to comply with SOX since the testing for SAS 70 can be leveraged to meet SOX compliance requirements.
“Since asset mangers are fiduciaries for their clients, it is important that they demonstrate that they have sound financial controls and safeguards, particularly around areas of operations and technology,” said Joseph W. Sack, managing director at SIFMA. “It is in the best interest of the client, the asset manager, and the auditor to be a part of an industry-developed and approved standard.”
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The Securities Industry and Financial Markets Association brings together the shared interests of more than 650 securities firms, banks and asset managers. SIFMA's mission is to promote policies and practices that work to expand and perfect markets, foster the development of new products and services and create efficiencies for member firms, while preserving and enhancing the public's trust and confidence in the markets and the industry. SIFMA works to represent its members’ interests locally and globally. It has offices in New York, Washington D.C., and London and its associated firm, the Asia Securities Industry and Financial Markets Association, is based in Hong Kong.