Selection of auditors for financial institutions: dialogue with regulator
The Bank of Russia and representatives of financial institutions, including banks, insurers, and non-governmental pension funds, discussed the issues of interaction with external auditors.
In 2020, the regulator released its recommendations for public joint-stock companies to organise risk management, internal control, internal audit, and audit-related activities of their boards of directors (supervisory boards). The recommendations also suggest ways to manage cooperation between audit committees and external auditors. Currently, the regulator considers the possibility of applying similar recommendations to financial institutions incorporated in other legal forms than PJSC.
The discussion participants shared their views on the existing practices of auditor selection and the principles of interaction between auditors and corporate governance bodies of financial institutions. A special focus was given to auditor rotation, conflict of interest and reporting assessment.
Based on the discussion outcome, the Bank of Russia has defined possible ways to improve the existing auditor selection practices and the cooperation between auditors and financial institutions, which the regulator will take into account when preparing the relevant recommendations.