TUESDAY 4 DECEMBER 2007

MR RICHARD SEXTON AND MR JOHN HITCHINS

  Q1277  Chairman: Good morning and welcome to the session. Please introduce yourselves for the record.

  Mr Sexton: I am Richard Sexton, head of the UK Assurance practice of PricewaterhouseCoopers which includes our audit practice.

  Mr Hitchins: I am John Hitchins, a banking audit partner of PricewaterhouseCoopers.

  Q1278  Chairman: What are the aims of an auditor when auditing a company?

  Mr Sexton: The audit is performed in accordance with standards and regulations in the UK now issued predominantly by international bodies. It seeks to provide comfort about historical financial information as embodied within the financial statements included in a company's annual report. That is the role of the statutory audit. In the UK we do perform other work at times at the request of companies predominantly in connection with interim announcements. That is also performed in connection with guidance issued by the Auditing Practices Board in the UK.

  Q1279  Chairman: Does auditing a bank present any additional problems compared with a non-financial company?

  Mr Hitchins: The only extra requirement placed on us when auditing a bank is our statutory duty to report to the FSA if we become aware of anything that is material to the exercise of the FSA's functions.