G20's FSB turns attention to bank auditors
LONDON, March 15
LONDON, March 15 (Reuters) - The Financial Stability Board is putting pressure on auditors to flag concerns they have to supervisors about banks and insurers whose books they check.
It marks a broadening of the FSB's reach into the financial sector and related services as regulatory task force to the world's top 20 economies (G20).
"Promoting high quality international accounting and auditing standards and practices is an important aspect of the FSB's activities," the board, chaired by Bank of Canada Governor Mark Carney, said on Thursday.
The financial crisis showed there was a need to improve the role auditors play in providing information to supervisors about financial institutions, it said.
The FSB wants greater international consistency in audit practices and has requested action from several global bodies.
Politicians have questioned why banks were given a clean bill of health by auditors and then having to be rescued by taxpayers only months later as the financial crisis unfolded.
The European Union has already proposed a draft law to tighten supervision of a sector dominated by the so-called "Big Four": KPMG, PwC, Ernst & Young and Deloitte.
The FSB said it will work with the global Basel Committee on Banking Supervision as it "develops new robust external audit guidance, to be proposed by end-2012".
There will be a similar initiative with the International Association of Insurance Supervisors for the insurance sector.
The FSB will request that the International Forum of Independent Audit Regulators reports on problems members face when inspecting audits of banks, especially large, systemically important lenders.
The board will check how the IFIAR has dealt with such problems and what it is doing to improve things.
The FSB said IOSCO, an umbrella group of global markets supervisors, has agreed to examine efforts by accounting standards boards to improve the information investors get from audits.
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