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23.08.2012

Regulation on the procedures for the preparation and submission of audit reports, approved by the DCA of the NBM, Minutes no.28 of August 8, 1997

Note: The translation is unofficial, for information purpose only

Published in the Official Monitor of the Republic of Moldova no.64-65 of October 02, 1997

Approved by
the Decision of the Council of Administration
of the National Bank of Moldova
Minutes no. 28 of August 8, 1997

REGULATION
ON THE PROCEDURES FOR THE
PREPARATION AND SUBMISSION OF AUDIT REPORTS

Amended by:

DCA of the NBM, no. 63 of 25.03.1999, Official Monitor of the Republic of Moldova no. 39-41 of 22.04.1999
DCA of the NBM, no. 124 of 03.06.2004, Official Monitor of the Republic of Moldova no. 91-95 of 11.06.2004
DCA of the NBM, no. 195 of 23.08.2012, Official Monitor of the Republic of Moldova no. 237-241/1427 of 16.11.2012

I.Authority

This Regulation is elaborated pursuant to the authority of the National Bank of Moldova provided by Articles 11, 44, and 47 (1) of the Law on the National Bank of Moldova, Articles 34, 35, and 37 (4) of the Law on Financial Institutions and Law on Audit.

 

II.Requirements for independent external auditors

1. Annually, banks shall sign a contract with an independent audit firm, accepted by the National Bank of Moldova, which shall fulfill the requirements of Article 34 (1) of the Law on Financial Institutions.
(Item 1 amended by the Decision of the NBM no.63 of March 25, 1999)
(Item 1 amended by the Decision of the NBM no.195 of August 23, 2012)
(Item 2 excluded by the Decision of the NBM no.195 of August 23, 2012)

3. Prior to entering into a contract with an independent audit firm, in accordance with Article 34 (1) of the Law on Financial Institutions, the independent audit firm shall present to the bank its license (the original or a notarized copy) for performing auditing activities, issued in accordance with the legislation in force, and the auditor’s qualification certificate of the financial institutions, issued by the National Bank of Moldova.
(Item 3 amended by the Decision of the NBM no.63 of March 25, 1999)
(Item 3 amended by the Decision of the NBM no.124 of June 3, 2004)
(Item 3 amended by the Decision of the NBM no.195 of August 23, 2012)

4. Annually, banks shall submit to the National Bank of Moldova information regarding:
1) the auditing period;
2) name, address, telephone number, a notarized copy of the license for performing auditing activities, a copy of the contract for rendering the auditing services, concluded between the bank and the independent audit firm;

4) excerpts from the minutes of the general meeting of the bank shareholders, within which the decision concerning the confirmation of the audit firm has been taken.
(Item 4 amended by the Decision of the NBM no.195 of August 23, 2012)

5. In the audit contract, concluded between the bank and the audit firm, must be stated that the auditor will prepare the audit report and opinion in accordance with Article 34 paragraph (1) letter b) of the Law on Financial Institutions and Law on Audit, as well as the management letter, and shall be responsible for their submission to the bank’s Board and to the National Bank of Moldova (Banking Regulation and Supervision Department) no later than April 30 each year. The aforementioned documents shall be prepared in the state language of the Republic of Moldova.
(Item 5 amended by the Decision of the NBM no.195 of August 23, 2012)

6. If the decision of the general meeting of shareholders for confirmation of the independent audit firm and the contract with the audit firm for the current financial year was concluded no later than December 31 of the last year, the information provided for in item 4 of Chapter II is to be presented by February 1 of the current financial year.
If the decision of the general meeting of shareholders for confirmation of the independent audit firm and the contract with the audit firm for the current financial year was concluded in the current financial year, the information provided for in item 4 of Chapter II is to be presented by April 30 of the current financial year, and the additional contract concluded with the audit firm shall provide for the following conditions:
1) the audit shall be performed for the entire financial year;
2) the audit firm shall fulfill the provisions of Article 34 paragraph (1) letters a), c) and d) of the Law on Financial Institutions, until the bank concludes a contract with the audit firm for the next financial year.
(Item 6 amended by the Decision of the NBM no.63 of March 25, 1999)
(Item 6 amended by the Decision of the NBM no.195 of August 23, 2012)

7. The bookkeeping assistance offered by the audit firm, which performs the bank’s audit control, shall be extended in the form of delivery of a written notice to the bank’s management on the major deficiencies existent in the structure or operation of bookkeeping and internal control systems of the bank that drew auditors’ attention during the audit and in the form of delivery of a list of written recommendations for the removal of these deficiencies. This assistance shall not refer to the direct involvement of the audit firm in the bank’s bookkeeping process.
(Item 7 complemented by the Decision of the NBM no.124 of June 3, 2004)
(Item 7 amended by the Decision of the NBM no.195 of August 23, 2012)

 

III.Auditing process

1. Annually, banks shall mandatorily be subject to an audit control conducted by an independent audit firm.

2. Audits shall be conducted in accordance with the “International Standards on Auditing” and “International Financial Reporting Standards”.
(Item 2 amended by the Decision of the NBM no.195 of August 23, 2012)

3. According to the audit standards, a management letter is a document prepared by the auditor for the bank’s Board on the internal control systems and operating procedures of the bank, which were addressed during the audit.  It is the prerogative of the auditor to mention any matter, which, in the auditor’s opinion, shall be brought to the attention of the bank’s Board. The management letter shall meet at least the following requirements:
1) to provide comments and observations on the accounting records, operating  systems, and internal control systems that were examined during the audit;
2) to identify the deficiencies and areas of concern in operating systems and internal control  systems, and to come with recommendations for their removal;
3) to inform the bank about the issues identified by the auditor during the auditing, which might have a significant impact on the operations of the bank, including any fraudulent activity committed by any employee of the bank; and
4) to inform the bank’s Board about any other issues considered by the auditor to be adequate.
(Item 3 amended by the Decision of the NBM no.124 of June 3, 2004)
(Item 3 amended by the Decision of the NBM no.195 of August 23, 2012)

 

IV.Publication of balance sheets and annual reports

Banks shall submit to the National Bank of Moldova, no later than April 30 of each year, the followings:
1. a copy of the newspaper(s) of general circulation, where the balance sheet and auditor’s opinion have been published; and
2. a copy of the published annual report of the bank, accompanied by a written confirmation that the bank will issue to the public free copies of it.

 

V.Maintenance of registers

The bank shall keep the original Audit Report, Auditor’s Opinion, and Management Letter at its head office and shall make such documents available to the supervisors of the National Bank of Moldova upon request.

 

VI.Appropriate measures

1. Pursuant to Article 38 of the Law on Financial Institutions and Article 75 of the Law on the National Bank of Moldova, the National Bank may apply sanctions to banks and may reject future appointments of an independent external auditor by the banks that does not comply with the provisions of the Law on Financial Institutions and this Regulation.

2. The National Bank of Moldova shall inform banks and their audit firms of any objections found in the analysis of the Audit Report, Auditor’s Opinion, Management Letter, on the compliance with the provisions of the Law on Financial Institutions and this Regulation, and shall require explanations of the causes of violations committed during the audit and their removal.
(Item 2 amended by the Decision of the NBM no.195 of August 23, 2012)

 

VII.Final Provisions

This Regulation becomes effective from the date of its publication in the Official Monitor of the Republic of Moldova.

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