The Institute of Chartered Accountants in England and Wales (ICAEW) has called for more information on the challenges and debate that takes place between bank auditors, the audit committee and executive management
In its report, Enhancing the dialogue between bank auditors and audit committees, the ICAEW recommends details of key accounting judgments that have been challenged by the audit committee to be published in banks’ annual reports expanding on the information currently provided to stakeholders.
The ICAEW said much of the bank audit process takes place behind closed doors and the lack of transparency has led to questions being raised over the extent of professional scepticism being applied.
ICAEW Financial Services Faculty head Iain Coke said public confidence had been “damaged” and needed to be re-built, and clear reporting, robust auditing and transparent governance processes are critical elements in making that happen.
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“Regulation must be complemented by competence and appropriate behaviour to produce effective governance,” Coke explained.
“Auditors must tell a full, clear story of the audit to audit committees, while audit committees, in turn, must tell their own story to the public to provide confidence in the governance process.”
The ICAEW wrote the report on the basis of a working group consisting of audit partners, audit committee chairs and other experts with big complex banks in mind.