The role of auditors and their usefulness have come under fire for their part in the banking crisis, the latest Treasury Select Committee report has revealed. In its report published today, the committee says the 'audit process failed to highlight developing problems in the banking sector, leading the committee to question how useful audit as it is currently designed is'. While it receives criticism for its usefulness, John McFall, an MP on the committee, said that the report 'does not conclude that auditors failed in their duties'. Those in the profession have vigorously defended the role of auditors. KPMG vice chairman Brendan Nelson told the committee that 'audit is around expressing an opinion on the truth and fairness of the financial statements and, in the context of the statutory audit responsibilities for 2007, auditors, we believe, discharged their responsibilities professionally and with care and diligence'. Issues around the communication between auditors and financial regulator the Financial Services Authority were also brought to attention, with suggestions for more consulting on a client's financial reports to take place between the two. Chief executive Michael Izza of the ICAEW said the body will work to implement this move: 'We welcome the conclusion that the FSA should take up our recommendations for closer working relations with the audit profession and stand ready to assist in this process.' The committee report also highlighted its concerns around conflict of interest between firms contracted for audit and non-audit work of a client. 'We were particularly concerned about auditors earning fees from work arising from securitisations, especially where assets were held off balance sheet,' it said. But Robert Hodgkinson from the ICAEW told the committee that while 'the issue of independence is one which naturally causes concern', it was very thoroughly examined in 2002- 03, and the conclusion, from the co-ordinated group on accounting and auditing matters was that blanket bans would be inappropriate'. McFall said that over the next few months the committee will be 'doing further inquiries looking at how to rebuild consumer trust in the financial sector as well as the international aspects of the banking crisis'.