The Financial Services Authority (FSA) and the Financial Reporting Council (FRC) have agreed a memorandum of understanding on greater co-operation and information exchange.
The agreement is designed to deliver a closer working relationship between the FSA and the FRC’s audit inspection unit, which operates a risk-based system of audit inspections.
The regulators say the memorandum underpins their increased dialogue on accounting and disclosure issues that started in 2005. It also follows the June 2010 publication of their joint discussion on the audit of financial institutions. (article continues below)
Richard Thorpe, accounting and auditing sector leader at the FSA, says: “The FSA relies on audited financial information to meet its regulatory objectives and it is imperative that we have confidence in the information provided to us. Sharing information with the FRC will go some way to mitigating our concerns.”