PRA’s evaluation confirms success of written auditor reporting policy
The UK’s Prudential Regulation Authority (PRA) has assessed the effectiveness of its Written Auditor Reporting policy. This policy, designed to enhance dialogue and report quality between auditors and supervisors, has proven highly successful.
Key findings from the evaluation include:
- The policy effectively improves the quality of auditor-supervisor discussions.
- It supports audit quality and regulatory alignment.
- It aids the PRA in promoting consistent and high-quality accounting practices, especially in areas like expected credit losses (ECL) under IFRS 9.
Looking ahead, the PRA plans to streamline the policy by asking fewer questions, particularly for smaller firms. Clearer guidance for auditors and setting clear goals for repeated questions will improve efficiency.
Although the policy has limited application, it has proved a useful model in framing the discussion between auditors and supervisors and helps to focus the attention of banks and auditors to produce high-quality reports.
Read more here.
