MORNBFI Vol. 1 - Planters Development Bank

APP. Q-3009.12.31of the BSP or the SEC in accordance withthen applicable generally accepted auditingand accounting principles and standards, forthe purpose of expressing an opinion onsuch statements.2. Non-audit services – anyprofessional services provided to thecovered institution by an external auditor,other than those provided to a coveredinstitution in connection with an audit or areview of the financial statements of saidcovered institution.3. Professional Standards - includes:(a) accounting principles that are(1) established by the standard setting body;and (2) relevant to audit reports for particularissuers, or dealt with in the quality controlsystem of a particular registered publicaccounting firm; and (b) auditing standards,standards for attestation engagements,quality control policies and procedures,ethical and competency standards, andindependence standards that the BSP or SECdetermines (1) relate to the preparation orissuance of audit reports for issuers; and(2) are established or adopted by the BSP orpromulgated as SEC rules.4. Fraud – an intentional act by one (1)or more individuals among management,employees, or third parties that results in amisrepresentation of financial statements,which will reduce the consolidated totalassets of the company by five percent (5%).It may involve:a. Manipulation, falsification oralteration of records or documents;b. Misappropriation of assets;c. Suppression or omission of theeffects of transactions from records ordocuments;d. Recording of transactions withoutsubstance;e. Intentional misapplication ofaccounting policies; orf. Omission of material information.5. Error - an intentional mistake infinancial statements, which will reduce theconsolidated total assets of the company byfive percent (5%). It may involve:a. Mathematical or clerical mistakesin the underlying records and accountingdata;b. Oversight or misinterpretation offacts; orc. Unintentional misapplication ofaccounting policies.6. Gross negligence - wanton orreckless disregard of the duty of due care incomplying with generally accepted auditingstandards.7. Material fact/information - any fact/information that could result in a change inthe market price or value of any of theissuer’s securities, or would potentially affectthe investment decision of an investor.8. Subsidiary - a corporation or firmmore than fifty percent (50%) of theoutstanding voting stock of which is directlyor indirectly owned, controlled or held withpower to vote by a bank, QB, trust entity orNSSLA.9. Affiliate - a corporation, not morethan fifty percent (50%) but not less thanten percent (10%) of the outstanding votingstock of which is directly or indirectlyowned, controlled or held with power to voteby a bank, QB, trust entity or NSSLA and ajuridical person that is under common controlwith the bank, QB, trust entity or NSSLA.10. Control - exists when the parentowns directly or indirectly more than onehalf of the voting power of an enterpriseunless, in exceptional circumstance, it canbe clearly demonstrated that such ownershipdoes not constitute control.Control may also exist even whenownership is one half or less of the votingpower of an enterprise when there is:a. Power over more than one half ofthe voting rights by virtue of an agreementwith other stockholders;b. Power to govern the financial andoperating policies of the enterprise under astatute or an agreement;Q RegulationsAppendix Q-30 - Page 2Manual of Regulations for Non-Bank Financial Institutions