MORNBFI Vol. 1 - Planters Development Bank

APP. Q-3009.12.313. In case there are no matters to report(e.g. fraud, dishonesty, breach of laws, etc.)the external auditor/auditing firm shallsubmit directly to BSP within fifteen (15)calendar days after the closing of the auditengagement a notarized certification thatthere is none to report.The management of the coveredinstitutions, including its subsidiaries andaffiliates, shall be informed of the adversefindings and the report of the externalauditor/auditing firm to the BSP shall includepertinent explanation and/or correctiveaction.The management of the coveredinstitutions, including its subsidiaries andaffiliates, shall be given the opportunity tobe present in the discussions between theBSP and the external auditor/auditing firmregarding the audit findings, except incircumstances where the external auditorbelieves that the entity’s management isinvolved in fraudulent conduct.It is, however, understood that theaccountability of an external auditor/auditing firm is based on matters within thenormal coverage of an audit conducted inaccordance with generally accepted auditingstandards and identified non-audit services.I. DELISTING AND SUSPENSION OFSELECTED EXTERNAL AUDITOR/AUDITING FIRM1. An external auditor’s duly selectedpursuant to this regulation shall besuspended or delisted, in a mannerprovided under this regulation, under anyof the following grounds:a. Failure to submit the report underItem "H" of this Appendix or the requiredreports under Subsec. X190.1;b. Continuous conduct of audit despiteloss of independence as provided under Item"E.1" or contrary to the requirements underthe Code of Professional Ethics;c. Any willful misrepresentation in thefollowing information/documents;(1) application and renewal foraccreditation;(2) report required under Item "H"; and(3) Notarized certification of theexternal auditor and/or auditing firm.d. The BOA found that, after duenotice and hearing, the external auditorcommitted an act discreditable to theprofession as specified in the Code ofProfessional Ethics for CPAs. In this case,the BOA shall inform the BSP of the resultsthereof;e. Declaration of conviction by acompetent court of a crime involving moralturpitude, fraud (as defined in the RevisedPenal Code), or declaration of liability forviolation of the banking laws, rules andregulation, the Corporation Code of thePhilippines, the Securities Regulation Code(SRC); and the rules and regulations ofconcerned regulatory authorities;f. Refusal for no valid reason, uponlawful order of the BSP, to submit therequested documents in connection with anongoing investigation. The external auditorshould however been made aware of suchinvestigation;g. Gross negligence in the conduct ofaudits which would result, among others,in non-compliance with generally acceptedauditing standards in the Philippines orissuance of an unqualified opinion whichis not supported with full compliance by theauditee with generally accepted accountingprinciples in the Philippines (GAAP). Suchnegligence shall be determined by the BSPafter proper investigation during which theexternal auditor shall be given due noticeand hearing;h. Conduct of any of the non-auditservices enumerated under Item "E.1" forhis statutory audit clients, if he has notundertaken the safeguards to reduce thethreat to his independence; andi. Failure to comply with thePhilippine Auditing Standards andPhilippine Auditing Practice Statements.Q RegulationsAppendix Q-30 - Page 8Manual of Regulations for Non-Bank Financial Institutions