Technical
4 Jul 2012

Bank audit transparency

A lack of transparency on decisions in the bank audit process has "damaged public confidence", claims an ICAEW Financial Services Faculty report

Enhancing the Dialogue Between Bank Auditors and Audit Committees says there should be more public access to details of accounting judgements challenged by the audit committee and that key decisions should be published in banks’ annual reports. Its recommendations include:

  • Considering the extent to which the objectives of the auditor, audit committee and management are aligned for annual reporting activities;

 

  • Balancing the level of co-operation and challenge accordingly;

 

  • Making any challenge and debate that has taken place more transparent, by including details in the annual report on key accounting judgements challenged by the audit committee, and debates between the auditor and audit committee, as well as auditor and executive management;

 

  • Ensuring bank auditors and audit committees have good relationships with the bank’s risk committee;

 

  • Considering key accounting judgements in the light of risk; and

 

  • Planning for an efficient year-end.

 

Julia Irvine