Last year, proposals by the Auditing
Practices Board to make auditors submit earlier requests for client details
from banks caused some disquiet.
There were concerns that dealing with banks was a ‘nightmare’ and delays in
getting information back could lead to qualified audits.
The APB has, however, now gone ahead with its plans in part, turning its
controversial draft into interim guidance. In the meantime, discussions are
still dragging on.
ICAEW senior manager Ruth Cooke says
that the interim guidance will make dealings between auditors and banks
smoother, and a pilot scheme will be implemented in the new year to test a fresh
system for confirmations.
‘The situation is not as drawn out as it seems,’ argues Cooke. ‘Other
accounting bodies are involved in discussions as well as a number of banks –
getting these together takes time.’
The draft, which looked into guidance on bank confirmations, also called for
auditors to provide a main account name and number by the auditor to
‘facilitate’ banks in identifying the appropriate customer more readily.
These recommendations flew in the face of the audit profession, which was
looking for more pressure on banks to return information at a much faster rate.
Auditors complained that even though they were getting information to banks
in a timely fashion, getting confirmations back was taking longer.
Bankers Association’s executive director, Paul Chisnall, said that some
auditor requests went astray.
But Cooke added that auditors also make mistakes in dealing with banks, and a
successful pilot – using two auditors and two banks – should lead to further
guidance next year to refine the process.
‘There will be further guidance next year as the pilot will be undertaken on
companies with 31 December year-ends. We’ll then sit down and see how it went.’
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