As a result of the financial crisis and recognition by the FSA of the need to engage more effectively with auditors, the FSA, following work with the Bank of England, has published a draft code of practice. This Code sets out principles to guide interactions between supervisors and auditors and is aimed at improving audit effectiveness and to ensure that supervisors are better informed about, and able to challenge the firms they regulate.

The Code proposes a framework which provides for open and co-operative consultation and dialogue at all levels, disclosure of information between the supervisor and auditor and proposals for the timing and content of bilateral meetings between auditors and supervisors and certain "high impact" regulated firms. Views and comments on the draft Code are invited by 25 March 2011.