The European Commissioner for Internal Market and Services, Michel Barnier, has today published a Green Paper on corporate governance in financial institutions. It is a wide-reaching document, with one of the questions asked being whether auditors' role should be amended or extended.
The Green Paper calls for a review of auditors' role in relation to risk-related information in financial institutions and also asks whether auditors' duty to flag to boards and authorities any risks they uncover as part of their auditing work needs to be examined.
Commenting on the Green Paper, Iain Coke, Head of the ICAEW Financial Services Faculty, said:
"All market participants, including auditors, need to reflect on the crisis and consider the lessons they can learn from it.
"Auditors are in a unique position, and interim findings from our own stakeholder research show that many believe that auditors could play a bigger role in risk reporting. However, it is fundamental that this exploration of the auditor's role does not create an expectation gap between what auditors can and cannot achieve, especially as regards to predicting future economic events.
"More may need to be done to explain what the audit process entails and what goes on behind the final audit report, including the discussions between auditors and audit committees."
To further examine and debate the Green Paper, ICAEW will next week bring together stakeholders from the profession for a roundtable debate in Brussels to discuss the questions raised in the document. The discussions will feed into the formal ICAEW submission to the consultation.
Media enquiries:
Contact Kirstina Reitan, ICAEW press office, on +44 (0)207 920 8607 or email kirstina.reitan@icaew.com.
Rate this article
Voting has now ended.