New draft international standard explores roles of auditors and bank supervisors

Press release  | 
12 February 2001

Auditors, bank supervisors and other interested parties are invited to comment on an exposure draft, "The Relationship Between Banking Supervisors and Banks' External Auditors", developed by the Basel Committee on Banking Supervision and the International Federation of Accountants' (IFAC) International Auditing Practices Committee (IAPC).

The tasks and responsibilities of bank supervisors and external auditors, as well as the challenges they face, have become increasingly demanding as the business of banking has become even more complex at both the national and international levels. The Basel Committee and IAPC share the view that a greater mutual understanding amongst banking supervisors and external auditors of each other's tasks and responsibilities and, where appropriate, communication improve the effectiveness of bank audits and supervision to the benefit of both disciplines, as well as the public at large.

The purpose of the proposed new International Auditing Practice Statement (IAPS) is to provide information and guidance on how the relationship between bank auditors and supervisors can be strengthened to mutual advantage, taking into account the Basel Committee's Core Principles for Effective Banking Supervision. Specifically, the proposed IAPS :

  • Describes the primary responsibilities of the board of directors and management;
  • Examines the essential features of the role of external auditor;
  • Examines the essential features of the role of supervisors;
  • Reviews the relationship between the supervisor and the auditor; and
  • Describes additional ways in which auditors and the auditing profession can contribute to the supervisory process.

Both the Basel Committee and IAPC recognise that because the nature of the relationship between auditors and bank supervisors varies significantly from country to country, the guidance may not be applicable in its entirety to all countries. Nonetheless, it will provide a useful clarification of the respective roles of the two professions in the many countries where significant working relationships exist or where the relationship is currently under study.

Comments on this exposure draft should be submitted by 12 June 2001. Comments may be submitted by post to the Basel Committee on Banking Supervision, CH-4002 Basel, Switzerland, faxed to +41 61 280 9100 or e-mailed to Comments may alternatively be submitted to or faxed to the IFAC Secretariat (+1 973 286 9570). The draft can be downloaded from the BIS website ( or from IFAC's web-site

Both IAPC and the Basel Committee will consider the comments received in the development of final guidance, which is expected to be published before the end of the year.

The Basel Committee on Banking Supervision is a committee of banking supervisory authorities established by the central bank Governors of the Group of Ten countries in 1975. It consists of senior representatives of bank supervisory authorities and central banks from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States.

IFAC is the worldwide organisation for the accountancy profession. Its mission is to develop and enhance the profession to enable it to provide services of consistently high quality in the public interest. Its current membership consists of 153 professional accountancy bodies in 113 countries, representing more than 2,000,000 accountants in public practice, education, government service, industry and commerce.