The relationship between bank supervisors and external auditors (Statement issued by the International Auditing Practices Committee after consultation with the Basel Committee)

This statement has been prepared in association with the Committee on Banking Regulations and Supervisory Practices ("the Basle Supervisors' Committee"). It was approved for publication by the International Auditing Practices Committee and by the Basle Supervisors' Committee at their respective meetings in March 1989. It has a common release date of July 1989.

Banks play a vital role in economic life and the continued strength and stability of the banking system is a matter of general public concern. The separate roles of bank supervisors and external auditors are important in this regard. The growing complexity of banking makes it necessary that there be greater mutual understanding and, where appropriate, more communication between the bank supervisors and external auditors. The purpose of this Statement is to provide information and guidance on how the relationship between bank auditors and supervisors can be strengthened to mutual advantage. However, as the nature of this relationship varies significantly from country to country the guidance may not be applicable in its entirety to all countries. The International Auditing Practices Committee and the Basle Supervisors' Committee hope, however, that it will provide a useful clarification of the respective roles of the two professions in the many countries where the links are close or where the relationship is currently under study.