In a recent blog we noted that the PRA had outlined in a consultation paper its plans to introduce two significant changes for auditors and actuaries. The PRA proposed:

  1. In relation to the largest domestic banks and building societies that pose most risk to financial stability (i.e. those with total assets over £50bn), the PRA will require their external auditors to provide written reports to the PRA as part of the statutory audit cycle.
  2. The PRA plans to bring into force its powers to apply disciplinary measures to an auditor or actuary that has failed to comply with a duty imposed by rules of the PRA or failed to comply with a duty under FSMA to communicate information to the PRA.

These changes have the potential for significant operational and financial impact on audit firms and there remain a number of areas where the PRA's plans would benefit from further consideration. We have therefore submitted a response to the consultation paper.