On 30 September 2021, the PRA published a letter (dated 29 September 2021) which it had sent to the chief financial officers of selected deposit-takers which provides thematic feedback from the regulator’s review of written auditor reports received in 2021.
Each year, the FCA receives a written report from its auditors responding to questions on issues of particular supervisory interest. The PRA provides feedback on what it has learnt from those reports through a number of channels. The main thematic findings are briefly set out in the letter, with detail provided in the two annexes. The first annex covers thematic findings on IFRS 9 expected credit loss accounting (ECL). The second annex covers thematic findings relating to the global benchmark reform. The letter also sets out how the PRA intends to use next year’s round of written auditor reports to explore risks related to climate change.
The findings in the letter do not identify any particular firm or auditor. PRA supervisors provide firm-specific feedback to firms and their auditors through continuous assessment meetings, regular auditor–supervisor bilateral meetings, and trilateral meetings involving supervisors, firm auditors, and the firm’s audit committee chair.