Mario Christodoulou, Accountancy Age, Tuesday 28 September 2010 at 14:02:00

KPMG suggests code to manage relationship with regulators

A code of conduct should be introduced to manage the relationship betweenregulators and auditors of banks, according to the head of Big Four firm KPMG.

InsiderBlog: Falling out of love - auditors and regulators

John Griffith-Jones, KPMG senior partner, said the relationship between bankauditors and regulators ?might benefit? from a set of protocols, in a submissionto a House of Lords investigation into audit competition.

In his submission, seen by Accountancy Age, Griffith-Jones saidthere should be no limitations on client information shared between regulatorsand auditors.

?The difficulty is in filtering and identifying the key issues from such avolume of information,? he said in the submission.

?This whole area might benefit from a code of conduct or a set of protocolswhich formally recognises the respective roles and responsibilities of alldifferent parties.?

The House of Lords is investigating the sometimes fractious relationshipbetween auditors and regulators. The relationship between the Financial ServicesAuthority (FSA) and auditors has deteriorated since the introduction of thetripartite system in 1997.

In July the FSA criticised auditors for failing to report under whistleblowing legislation. Richard Thorpe, accounting and auditing leader at the FSA,told Accountancy Age in July that auditors ?rarely report to us undertheir whistle blowing obligation.?

?They argue that this is because they get their clients to inform us ofproblems, but we believe it would be better for the auditor to inform ushimself,? he said at the time.

Further Reading:

NewFSA powers will force auditors to speak out