THE NEW UK banking audit and supervisory regime could learn a lot from the Swiss, according to a new ICAS report.
Switzerland auditors have a significant and direct role in banking supervision that dates back to 1934, with a special unit charged with supervising bank audits.
Research for ICAS by the University of East Anglia found this model provided specialist banking audit knowledge, which ensured strong benchmarking on performance.
It further recommends that the FSA, and in due course the Prudential Regulatory Authority, can increase engagement with auditors by approving auditors as banking experts, on site observation by the FSA of banking audit engagements, and post-hoc file reviews by the FSA of auditors’ work.
“With both institutional reform and ongoing debate about the role of auditors post financial crisis, it is a good time to consider features of the Swiss system of banking supervision that may be of relevance to the UK. We hope this report will feed into the consultation process for the Code of Practice,” said David Wood, executive director of technical policy at ICAS.
The report, “The contrasting role of auditors in UK and Swiss banking supervision”, by Ian Dewing and Peter Russell, can be downloaded here.
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