Ojo Marianne: The Role of the External Auditor in Bank Regul

This research not only proposes an alternative single regulator model for the UK, but also addresses how the external auditor could assist the regulator through an indirect system of supervision which provides for the most effective means of obtaining and evaluating crucial information relating to the well-being of a financial institution. In recommending the external auditor‘s expertise, such issues concerning the need for greater pro- active monitoring by regulators, safeguards operating to ensure that the external auditor can fulfil his roles effectively, the need for clearer definition of the external auditor‘s role (reducing the audit expectations gap), and audit liability interalia require consideration. Even though the external auditor could not gain access to such information as the central bank‘s early warning indicators, there‘s still a role for the external auditor at an individual firm level in providing vital information and performing numerous specialised tasks. As well as this role, the role of assisting the regulator in such a way as to avoid "regulatory capture", will be considered briefly.