The Basel Committee on Banking Supervision has launched a consultation on amended guidance of external audits of banks, to enhance existing papers written over the last decade.
The supervisory paper is intended to supercede the 2002 Basel Committee guidance on the relationship between banking supervisors and external auditors, and 2008’s work on external audit quality and banking supervision.
It was published along with a letter to the International Auditing and Assurance Standards Board (IAASB), calling for enhanced International Standards on Auditing (ISAs) to include more authoritative bank auditing guidance.
The proposed guidance covers expectations for:
– The effective discharge of external auditors’ duties;
– Audit committees’ contribution to audit quality in their oversight of the external audit;
– A relationship leading to regular and useful communication between auditors and supervisors; and,
– Enhancing the quality of bank audits through regular and effective dialogue between banking supervisory authorities and audit oversight bodies.
Basel Committee and governor of Sveriges Riksbank chairman Stefan Ingves said the guidance "will help raise the bar" regarding supervisors’ expectations of external auditors and audit committees, adding that the committee recognises "the great importance of audit standards" and is keen to support the IAASB.
Deadline for comment is 21 June 2013.