Regulatory AlertsFG13/3 - Code of Practice for the relationship between the external auditor and the supervisor
The Financial Conduct Authority (FCA) issues this final guidance to update the Code of Practice governing the relationship between external auditors and supervisors following the Financial Services Act 2012. The document incorporates feedback from a consultation process and reflects statutory duties for the FCA to meet with auditors of certain firms as well as changes in supervisory practice. It serves as the definitive framework for engagement between regulators and auditors of high-impact firms to enhance prudential regulation.
As a result of the financial crisis, we recognised the need to engage more effectively with auditors. So the Financial Services Authority's (FSA) Supervisory Enhancement Programme put annual bilateral meetings in place between supervisors and external auditors of high impact firms. The FSA then published DP10/3 – Enhancing the Auditor’s Contribution to Prudential Regulation (published jointly with the Financial Reporting Council (FRC)), which stated an objective to improve the quality and frequency of this engagement.
The FSA published their Code of Practice for the relationship between the external auditor and the supervisor in May 2011. This Code has been updated to reflect the changes in the statutory objectives of the FCA under the Financial Services Act 2012. A separate Code of Practice was published by the Prudential Regulation Authority (PRA) on the 1 April 2013.
Following consultation on draft guidance, we publish here our final guidance on these matters. We also set out a summary of the feedback received through the consultation and our responses to the issues raised.
This guidance was updated in March 2016 to reflect the FCA’s statutory duty to meet the auditors of certain firms and changes to supervisory practice.
FG13/3 - Code of Practice for the relationship between the external auditor and the supervisor
FG13/3 - Summary of Feedback received
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