BIS: external audit quality must improve

Daily news headlines

BASEL - The Basel Committee has this week published a new paper on the quality of external audit and banking supervision. It is the 16th paper released by the Bank for International Settlements (BIS) - responsible for the Basel II capital accord - so far this year.

The Committee says there has been an increase in banking and supervisory reliance on audited information and a change in the nature of external audit over the past few years, while recent events have increased the importance attached to external audit.

The paper flags increased concerns over the risk of audit failures since the global expansion of the larger auditors, paralleled by increasing complexity of accounting standards and financial instruments. The Committee says high-quality audits must match high-quality supervision.

On the amplified importance of fair value estimation processes in the current crisis (the subject of the Committee's previous paper released in November), the Committee again underscores the importance of high-quality audit and indicates key steps to take in response to challenges to valuation, such as governance, the use of reliable inputs and diverse information sources.

The Committee emphasises that transparency through clear and reliable information, supported by quality auditing, is needed to rebuild market confidence, and in this capacity promises close future involvement.

The BIS will continue its focus on audits through group support and liaising with external auditors, promoting enhanced and sound audit guidance, practices and standards, and calling for enhanced transparency over the financial positions and structure of global auditing businesses.

The paper can be downloaded in full from here.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Investment banks: the future of risk control

This survey report explores the current state of risk controls in investment banks, the challenges of effective engagement across the three lines of defence, and the opportunity to develop a more dynamic approach to first-line risk control

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here