more-arw search

UK watchdog wants more from bank auditors

Banks in England could soon see increased scrutiny from auditors.

Banks in the United Kingdom could be facing tighter audit regulations if one agency gets its way.

Many of the country's auditing firms came under fire from members of Parliament during 2007-09, when banks requested massive bailouts after receiving the all-clear from auditors, Reuters reported. The Financial Reporting Council, the U.K. accounting industry watchdog, recently issued a report in which it blasted accountants for not being skeptical of what they are told by banks.

Speaking to the news source, FRC Director of Auditing Paul George said his agency is set to receive additional resources it can use to hold auditors accountable, which he hopes will spur faster improvements in the industry.

"I see these additional powers very much as being a backstop," he said. "I believe the actions firms are taking should further accelerate improvements in performance."

A separate investigation from FRC indicated U.K. banks would not be required to disclose to investors their receipt of confidential government support, nor should auditors be always required to express doubts about a bank's short-term survival in such cases, the Financial Times reported. If a bank receives liquidity support and is able to meet its long-term liabilities, it can be justified in labeling itself a going concern, according to the source.