5 February 2002
The Chief Executive
All authorized institutions
Dear Sir / Madam,
The Basel Committee on Banking Supervision issued on 21 January 2002 a paper "The Relationship between Banking Supervisors and Banks' External Auditors" which was jointly developed with the International Auditing Practices Committee of the International Federation of Accountants.
The purpose of the paper is to provide information and guidance on how the relationship between bank auditors and supervisors can be strengthened to mutual advantage, taking into account the Basel Committee's Core Principles for Effective Banking Supervision. Specifically, the paper:
A copy of the paper is attached for your reference.
We recommend that authorized institutions consider whether their internal control processes can be improved in the light of the guidance in the paper. In order to further strengthen the relationship between bank auditors and the HKMA, we will have regard to the guidance given in this paper when formulating relevant guidelines in our Supervisory Policy Manual.
I hope that you will find this paper helpful.
Yours faithfully,
Simon Topping
Executive Director (Banking Policy)