The client, the challenge
Gravita audits a small bank that is regulated by the PRA and FCA. As part of the audit, we required an audit expert to assist with work relating to the going concern of the bank. Gravita brought in IQ-EQ for assistance with reviewing the bank’s internal capital adequacy assessment process (ICAAP), internal liquidity adequacy assessment process (ILAAP) and to undertake various audit work on the bank’s internally prepared going concern assessment (GCA). The purpose of this review was to enable us to determine the bank’s ability to continue to trade as a going concern whilst acknowledging the bank’s commercial activities, the PRA’s capital adequacy requirements and other potential financial constraints on the bank.
The main challenge arising from this work was the quality and timeliness of the information delivered by the bank due to a number of internal issues, including changing regulatory landscape and performance of bonds post balance sheet. As a result, completion of this workstream was significantly slower than expected.
The solution
Working on behalf of Gravita, IQ-EQ conducted an in-depth analysis of all the documentation used by the bank to draft their internal GCA, which is subject to approval by the Board. Following this analysis, IQ-EQ forwarded a series of questions to us and the bank. As a result, the bank made substantive changes to their internal GCA. IQ-EQ was then able to draft an independent assessment report and complete the necessary audit work for Gravita relating to the bank’s GCA, augmenting our own work towards issuing the GCA.
The process
Collaboration was key to getting this audit across the line. IQ-EQ’s deep expertise in the financial services sector played a crucial role, especially with the complexities of this small bank. We’ve worked alongside each other previously on other highly regulated clients, so know their experience is second to none. IQ-EQ’s expertise allowed them to provide critical insights, ensuring the bank’s compliance with PRA regulations and supporting the audit process.
Gravita’s longstanding relationship with IQ-EQ added value to the project, drawing on mutual trust and a shared commitment to excellence. The synergy between the two firms allowed for a smooth, efficient workflow, even with the challenges presented by the bank’s internal issues and regulatory landscape changes.
Effective tech-enablement, alongside strong communication between teams, was vital to ensure timely delivery and accurate findings. This collaborative approach exemplified how combining expertise with seamless teamwork results in successful outcomes, benefiting both firms and the client alike.
The result
In IQ-EQ’s role as the auditor’s expert, they delivered a detailed report and necessary working papers of their findings. The report and work were designed to reassure Gravita in determining the bank adhered to the PRA regulations, and assumptions were reasonable, given the industry the entity operated within. This enabled us to issue a clean audit report in connection with the GCA.
The quality of IQ-EQ’s analysis strengthened the institutional relationship with Gravita, driving both parties to refer and outsource further work to one another.
Gravita is a full service, tech-enabled accountancy firm, providing audit, accounting, outsourcing, tax, advisory support and more. The Gravita team has supported the financial services sector, including both PRA and FCA regulated businesses, for decades. Through our extended experience in providing audits, to include CASS audits to regulated businesses, we have worked with members of the team at IQ-EQ for many years, supporting shared clients who need specialist support in this complex sector. Gravita is a member of DFK International, a global alliance of accounting firms and their expert teams, working closely together across over 450 offices in over 90 countries, meaning we can service our clients, wherever they wish to do business. Read more about Gravita and how we work with the financial services sector here.
IQ-EQ is a leading global investor services group with an unrivalled offering to meet the administration, compliance and reporting needs of the investment sector worldwide. The firm’s specialist UK regulatory compliance team can assist at all stages of compliance requirement, from initial authorisations to ongoing advice and support.
