The profession has begun discussions around key proposals in the Turner review, which could see greater communication between auditors and the regulator, as well as changes to fair value rules. In addition to calling for tighter regulation around bank liquidity, chairman of the Financial Services Authority, Lord Adair Turner, said that there is s 'strong case for bank regulators such as the FSA to be far more involved than in the past in the review and comparison of accounting approaches to fair value estimates and loan impairment provisions.'The FSA, he suggested, could become more involved with the financial reports of the banks and suggested counter-cyclical capital buffers, building up in good economic times so that they can be drawn on in downturns, and reflected in published account estimates of future potential losses. His review has triggered mixed reactions. ICAEW chief executive Michael Izza, said that it was difficult to predict a company's position in the economic cycle, so the proposal 'could potentially undermine transparency of financial reports.' Accounting firms have believe the proposals could mean the regulator now itself making judgements on the decisions of senior management. Marcus Sephton, Head of Regulatory Services, KPMG in UK, described this as 'a deliberate and fundamental shift for the regulator away from their previous principle of focusing on the systems and controls environment.''These moves have essentially given the FSA the power to re arrange the priorities of management should they deem it necessary.'Senior management should now expect to be seriously challenged on fundamental issues like management competence, business models, strategy and the interaction of conduct and prudential issues.'In future, there will be greater emphasis on examining what is actually happening on the ground, by testing outcomes through mystery shopping or branch visits, for example,' he said. PricewaterhouseCoopers said returning 'to an old fashioned principle of saving up for bad times ahead will introduce a counter-cyclical measure to the current regime aimed at reducing the probability of another banking crisis'. Tony Clifford, advisory partner at Ernst & Young said the proposal 'will cause less difficulties for the accounting industry than some of the other suggestions being made by regulators'. The Accounting Standards Board has welcomed the review and also offered its support for economic cycles reserving, 'if it is agreed between the bank and its regulator'. The Financial Reporting Council, which has been discussing counter-cyclical measures with companies and industry experts, has also welcomed the review.