MORNBFI Vol. 1 - Planters Development Bank

APP. Q-3009.12.31GUIDELINES TO GOVERN THE SELECTION, APPOINTMENT, REPORTINGREQUIREMENTS AND DELISTING OF EXTERNAL AUDITORS AND/ORAUDITING FIRM OF COVERED ENTITIES[Appendix to Sec. 4189Q (2008 - 4180Q) and 4162Q (2008 - 4190Q)]Pursuant to Section 58 of the RepublicAct No. 8791, otherwise known as "TheGeneral Banking Law of 2000", and theexisting provisions of the executedMemorandum of Agreement (hereinafterreferred to as the MOA) dated 12 August2009, binding the Bangko Sentral ngPilipinas (BSP), Securities and ExchangeCommission (SEC), Professional RegulationCommission (IC) - Board of Accountancy(BOA) and the Insurance Commission (IC)for a simplified and synchronizedaccreditation requirements for externalauditor and/or auditing firm, the MonetaryBoard, in its Resolution No. 950 dated02 July 2009, approved the followingrevised rules and regulations that shallgovern the selection and delisting by the BSPof covered institution which under speciallaws are subject to BSP supervision.A. STATEMENT OF POLICYIt is the policy of the BSP to ensureeffective audit and supervision of banks,QBs, trust entities and/or NSSLAs includingtheir subsidiaries and affiliates engaged inallied activities and other FIs which underspecial laws are subject to BSP supervision,and to ensure reliance by BSP and the publicon the opinion of external auditors andauditing firms by prescribing the rules andregulations that shall govern the selection,appointment, reporting requirements anddelisting for external auditors and auditingfirms of said institutions, subject to thebinding provisions and implementingregulations of the aforesaid MOA.B. COVERED ENTITIESThe proposed amendment shall applyto the following supervised institution, ascategorized below, and their externalauditors:1. Category Aa. UBs/KBs;b. Foreign banks and branches orsubsidiaries of foreign banks, regardless ofunimpaired capital; andc. Banks, trust department of qualifiedbanks and other trust entities with additionalderivatives authority, pursuant to Sec. X611regardless of classification, category andcapital position.2. Category Ba. TBs;b. QBs;c. Trust department of qualified banksand other trust entities;d. National Coop Banks; ande. NBFIs with quasi-banking functions.3. Category Ca. RBs;b. NSSLAs;c. Local Coop Banks; andd. Pawnshops.The above categories include theirsubsidiaries and affiliates engaged in alliedactivities and other FIs which are subject toBSP risk-based and consolidated supervision:Provided, That an external auditor who hasbeen selected by the BSP to audit entitiesunder Category B and C and if selected bythe BSP to audit covered entities underCategory B is automatically qualified to auditentities under Category C.C. DEFINITION OF TERMSThe following terms shall be defined asfollows:1. Audit – an examination of thefinancial statements of any issuer by anexternal auditor in compliance with the rulesManual of Regulations for Non-Bank Financial InstitutionsQ RegulationsAppendix Q-30 - Page 1