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Viewing report
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The Role of the External Auditor in Bank Regulation
and Supervision. Edition No. 1
VDM Publishing House, June 2009, Pages: 416
This research not only proposes an alternative
single regulator model for the UK, but also
addresses how the external auditor could assist the
regulator through an indirect system of supervision
which provides for the most effective means of
obtaining and evaluating crucial information
relating to the well-being of a financial
institution.
In recommending the external auditor’s expertise,
such issues concerning the need for greater pro-
active monitoring by regulators, safeguards
operating to ensure that the external auditor can
fulfil his roles effectively, the need for clearer
definition of the external auditor’s role (reducing
the audit expectations gap), and audit liability
interalia require consideration.
Even though the external auditor could not gain
access to such information as the central bank's
early warning indicators, there’s still a role for
the external auditor at an individual firm level in
providing vital information and performing numerous
specialised tasks. As well as this role, the role of
assisting the regulator in such a way as to
avoid “regulatory capture”, will be considered
briefly.
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