NEW cooperation between the regulators and auditors of banks cannot be fairly characterised as “clubby tip offs”, the head of PwC in the UK has said.
Ian Powell, in a letter to the Financial Times this morning, criticised a previous article which described new proposals as making regulators “too dependent on clubby tip offs”.
He said the view did not “do justice” to the proposals which would require regulators to offer their insight of the banking sector to auditors.
“The dialogue needs to be two-way so that bank auditors benefit from the regulators’ knowledge and use this to help inform their audit opinions.” He said in the letter that it would be of direct beneift to investors.
Accountancy Age revealed in December that the Bank of England is putting the finishing touches to a proposed new set of protocols which would require bank auditors to meet with regulators from the Bank on a more regular basis.
The Bank of England is preparing to take over the regulation of banks from the Financial Services Authority.
Powell was among the heads of the Big Four firms who appeared before the House of Lords economic affairs committee last year to answer questions on the audit of banks during the crisis and the audit market.
During the November hearing they were accused of misleading investors through audit reports of the banks as the crisis unravelled. Powell defended the record of the Big Four. “They were not misleading statements. They were statements that gave full disclosure as we came through that year-end,” he said.
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