Punch-drunk auditors

The Financial Services Authority has given auditors another pasting.
Back in July the regulator complained quite publicly that it was worried auditors suffered from a lack of professional scepticism and said it would seek new powers to punish them.
Today the FSA attacked auditors for failing to check the reporting on their clients’ assets properly.
It cites worrying audits where clients received a clean bill of health despite breaking key rules on asset reporting.
The FSA has now threatened it will take action if there is no effort to sort things out.
Is it me or is the FSA beginning to look like it’s on a crusade about audit standards? Certainly this year has seen more criticism from the FSA on audit than all the years I’ve been working at the Age put together.
There is a new aggression about the regulator and, given the threats, a new urgency to see some change.
It’s now very clear that the FSA believes it should be regulating auditors alongside the Financial Reporting Council meaning the array of watchdogs now facing auditors is quite considerable. Whether there is a tussle going on in the background between the regulators is unknown but the FRC must be feeling the effects of someone else coming onto their turf, making a lot more noise and get quite a bit of attention. Certainly seems like FSA officials are trying to justify their existence while waiting for some pretty extreme restructuring of financial regulation.

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