PracticeAuditReforms to transform auditor-regulator relations

Reforms to transform auditor-regulator relations

Proposals may suggest structured relationship between auditor and regulator

Auditors may revive their open dialogue with regulators and even work for
them while conducting their audits, as part of new proposals expected to be
released this week.

The proposals will reopen dialogue between regulators and may lead to the
expansion of so called Section 166 reports, used by regulators to seek
information on a potential problem area in accounts.

The once healthy relationship between auditors and the Bank of England was
left to sour when the Tripartite System came into effect in 1997. The new paper
will seek to revive this system under a more structured approach.

Auditors may also be asked to take part in expanded Section 166 reports.
Under the proposals auditors may be asked to take on additional work, as well as
their statutory duties, to investigate areas of interest to regulators within a
company.

The measures are part of proposals being considered in the wake of the
crisis, and are part of a wider industry rethink about the value of audit.

Further reading:

Bank
auditors eyed for whistleblower role

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