Management bias needs more attention
Accountants have been urged to pay more attention to the management bias of the banking industry. The Financial Services Authority (FSA) has said that bank auditors need to improve cooperation between themselves, banks and supervisors. Problems in the financial crisis need to be avoided in order to ensure that the future of the banking sector is transparent and to make the banks more accountable.
I feel that if the accountants and auditors’ relationship with the banks are too close, it could provide management bias. In order to provide an independent and unbiased service and opinion, the auditors need to take a more robust approach. This will enable a more transparent banking sector in the future.
With the recent collapses of banks such as the Royal Bank of Scotland (RBS), HBOS, and Northern Rock, the banking sector needed a much needed reform. The accountants can do their bit by making sure an unbiased opinion is offered and the independency in the relationship is maintained. I feel if this continues the banking industry will begin to improve as more trust will be offered by the outsider.
Below is the link to the Bloomberg article:
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