On 30 September 2026, the Prudential Regulation Authority (PRA) published a letter that it had sent to chief financial officers of selected PRA-regulated deposit-takers providing thematic feedback from the PRA’s review of written auditor reports received in 2026 covering IFRS 9 expected credit loss accounting (ECL) and accounting for climate risk.
To help firms benchmark and identify areas for further improvement, the annex to the letter sets out the range of practice observed and the PRA’s areas of focus. For its 2027 review, the PRA have asked for auditors’ views on firms’ progress in these areas. The PRA encourages firms to perform their own assessment and share it with their auditors.
The PRA have also asked for auditors’ views on firms’ processes for identifying and monitoring credit risks in private market exposures and reflecting changes in ECL in a timely manner. This reflects challenges in identifying and aggregating exposures and obtaining timely and reliable data on complex, leveraged, interconnected and correlated risks. This is forward looking work to support wider cross-firm supervisory analysis, rather than a finding from the current review.