The external auditor plays a crucial role in ensuring financial stability and protecting investor interests in UK banks. They must maintain independence and integrity while verifying financial statements. However, there is concern that auditors may prioritize commercial interests over shareholder interests. Measures need to be in place to safeguard auditor independence. The auditor can assist regulators like the FSA in supervising and enforcing regulations to manage risks effectively. Efforts to improve audit independence are ongoing, with a focus on reviewing and enhancing safeguards.