IFAC Response to BCBS Consultation External Audits of Banks

IFAC welcomes the opportunity to comment on the Basel Committee on Banking Supervision (BCBS) consultative document, External audit of banks. IFAC recognizes the importance of high-quality auditing and acts to promote and enhance audit quality around the globe. This includes supporting the development, adoption, and implementation of high quality, internationally accepted auditing and quality control standards; promoting the need for global regulatory convergence; and supporting the development of strong professional accountancy organizations and accountancy firms.

IFAC’s comment letter to the BCBS includes several pertinent matters with respect to external audits of banks, including:

(i) Audit Quality—A Holistic View. Recognizing that while the primary responsibility for performing quality audits rests with auditors, audit quality is best achieved in an environment where there is support from other participants in the financial reporting supply chain. Therefore, a holistic view of audit quality should be considered to determine the best means by which measures can be taken to improve it.

(ii) Quality of Information. Recognizing that the quality of information being reported by banks, and which is of critical interest to banking supervisory authorities, is a function of several factors besides the quality of the external audit, and includes the robustness of the reporting framework and the competence of those preparing the information.