On February 10, the UK Financial Services Authority (FSA) published for consultation a draft code of practice designed to improve audit effectiveness and ensure that supervisors are better informed about, and able to challenge, the firms they regulate.

The code of practice (the product of a joint FSA/Bank of England project) proposes increased coordination between auditors and supervisors. This should enhance the ability of the FSA to scrutinize specific accounting practices and related judgments and highlight emerging problems.