Luxembourg Financial Institutions Required to Comply with New Checklist

The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, has introduced a new compliance checklist for financial institutions operating in the country. The checklist is designed to ensure that these institutions adhere to international auditing standards and maintain high ethical and quality control standards.

Adoption of International Auditing Standards

According to the CSSF, the adoption of international auditing standards by means of EU Regulation No 24-02 will enable the continuation of the existing standards framework applicable to statutory audit activity in Luxembourg. The regulation has adopted sections from the International Auditing and Assurance Standards Board (IAASB) handbook, as well as provisions introduced by the audit directive and EU regulations.

Key Changes

Sections from the IAASB handbook have been adopted
Provisions from the audit directive and EU regulations have also been incorporated

Quality Control Standards and Ethics Codes for Approved Auditors

In addition to auditing standards, the CSSF has also adopted international quality control standards and ethics codes for approved auditors. These standards have been supplemented by provisions applicable in Luxembourg to ensure a consistent framework for all financial institutions operating in the country.

Requirements

Retention of working papers
Use of cloud computing infrastructure (with prior approval from the CSSF)
Submission of a dedicated form to the Public Oversight of the Audit Profession Department

Working Papers and Cloud Computing Infrastructure

Financial institutions are required to keep their working papers on the territory of Luxembourg or outside the territory, provided that a third party guarantees compliance with minimum requirements set out in paragraphs 34D-1(n) and 60R-1 of the Luxembourg supplement to ISQM 1.

Prior Approval Requirements

Prior approval from the CSSF is required before using a cloud computing infrastructure for the storage of working documents
A dedicated form must be submitted to the Public Oversight of the Audit Profession Department

Benefits

The new compliance checklist aims to ensure that financial institutions in Luxembourg maintain high standards of auditing, quality control, and ethics, thereby enhancing investor confidence and protecting the integrity of the financial system.

Key Benefits

Enhanced investor confidence
Protection of the integrity of the financial system
Maintenance of high ethical and quality control standards
Continuation of existing standards framework applicable to statutory audit activity in Luxembourg