BCBS 244

Definition

BCBS 244 is a document published by the Basel Committee on Banking Supervision on March 2013 in the Accounting and Auditing category.

Title

External audits of banks.

Abstract

The recent financial crisis not only revealed weaknesses in risk management, control and governance processes at banks, but also highlighted the need to improve the quality of external audits of banks. Given the central role banks play in contributing to financial stability, and therefore the need for market confidence in the quality of external audits of banks' Financial Statements, the Basel Committee is issuing for consultation this guidance on external audits of banks.

This document describes, through sixteen principles and explanatory guidance, supervisory expectations regarding audit quality and how that relates to the external auditor's work in a bank. Implementation of the principles and the explanatory guidance is expected to improve the quality of bank audits and enhance the effectiveness of prudential supervision which is an important element of financial stability.

This document sets out supervisory expectations of how:

1. external auditors can discharge their responsibilities more effectively;
2. audit committees can contribute to audit quality in their oversight of the external audit;
3. an effective relationship between the external auditor and the supervisor, which allows greater mutual understanding about the respective roles and responsibilities of supervisors and external auditors, can lead to regular communication of mutually useful information; and
4. regular and effective dialogue between the banking supervisory authorities and relevant audit oversight bodies can enhance the quality of bank audits.

This document enhances and supersedes the Committee's guidance The relationship between banking supervisors and bank's external auditors (2002) and External audit quality and banking supervision (2008). In addition to the proposed guidance, the Committee is publishing a letter to the International Auditing and Assurance Standards Board (IAASB) on areas where it believes International Standards on Auditing could be enhanced. Serving as an observer on the Basel Committee group that developed the revised guidance, the IAASB provided helpful and meaningful input to this effort.

Document Profile

• Publication Date: March 2013
• Publication Type: Consultative
• Publication Status: Closed
• Publication Category: Accounting and Auditing
• Number of Pages: 44
• Keywords: External Audit, Audit, Professional Scepticism, Audit Committee, Audit Firms

See Also

• BIS Website: Web Page
• PDF File: Download

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