On tentative selection of audit organisations to be entrusted by the Bank of Russia Board of Director to conduct inspections of credit institutions (branches thereof)
In compliance with Clauses 1.1 and 1.3 of Bank of Russia Regulation No.
An audit organisation set up in compliance with the Russian Federation legislation (a Russian audit organisations) shall be entitled to take part in tentative selection:
the company should be a member of a self-regulatory organisation of auditors in compliance with the requirements of Article 3 of Federal Law No.
the company should have an unstained business reputation;
by the moment of tentative selection, the company should have a five-year experience of conducting audit inspections of credit institutions according to the requirements of Article 42 of the Federal Law ‘On Banks and Banking Activities’ (in the wording of Federal Law No.
the company should have no records, in the course of three years preceding the moment of tentative selection, of effective court rulings on the satisfaction of customers’ claims on the audit organisation (auditors employed by such organisation) related to the quality of audit activities (audit services);
the company should have no records, in the course of three years preceding the moment of tentative selection, of disciplinary sanctions against this audit organisation, auditors employed by such organisation, stipulated by Parts 1 and 6 of Article 20 of the Federal Law ‘On Audit Activities’ (except for disciplinary measures envisaged by Clauses
the company should hold liability insurance against violating an agreement on providing audit services and (or) causing damage to a third party’s property as a result of auditing;
in the course of five years preceding the moment of tentative selection, the company should have no instances of unmodified opinion expressed in auditor’s reports on the reliability of accounting (financial) statements of an audited credit institution, if later on there were identified facts of material unreliability of reported data in the indicated accounting (financial) statements for the respective period, which gave grounds for revoking the banking licence from such credit institution under Article 20 of the Federal Law ‘On Banks and Banking Activities’, or for initiating measures to prevent insolvency (bankruptcy) of the credit institution stipulated by Article 189.10 of Federal Law No.
An audit organisations set up in compliance with the legislation of foreign states (a foreign audit organisation) shall be also entitled to take part in tentative selection:
the company should have a five-year experience of conducting audit inspections of credit institutions by the moment of tentative selection;
the company should not have any records, in the course of three years preceding the date of tentative selection, of effective court rulings on the satisfaction of customers’ claims on the audit organisation (auditors employed by such organisation) related to the quality of audit activities (audit services);
the company should be a party to a professional liability insurance contract;
in the course of five years preceding the moment of tentative selection, the company should have no instances of unmodified opinion expressed in auditor’s reports on the reliability of accounting (financial) statements of an audited credit institution located in the Russian Federation, and (or) its subsidiary credit institution, branch established in foreign states, if later on there were identified facts of material unreliability of reported data in the indicated accounting (financial) statements for the respective period, which gave grounds for revoking the permit (banking licence) from such credit institution or for initiating measures to prevent insolvency (bankruptcy) of the credit institution according to the legislative requirement of the home country of this credit institution.
An application to take part in tentative selection shall be compiled according to the form of Annex 1 to Bank or Russia Regulation No.
An audit organisation shall be entitled to submit only one application to take part in tentative selection.
Audit organisations, which have failed to submit their applications within the set terms, shall not be allowed to take part in tentative selection.
An application to take part in tentative selection in a hard copy or an electronic format (on detachable machine devices) shall be sent by an audit organisation to the Bank of Russia to the following address: 12 Neglinnaya Street, Moscow, 107016 (with a note ‘Submitted for Tentative Selection to Conduct Inspections of Credit Institutions’) by a registered mail with return receipt requested or shall be delivered via the Document Dispatch Division of the Bank of Russia Administrative Department (address: 3 Sandunovskiy Lane, Moscow, business hours: from 9.00 a.m. to 5.30 p.m., on Fridays till 4.15 p.m. (lunch: from 12.00 a.m. to 1.00 p.m.) in a sealed envelope.
An envelope should contain the full and abbreviated (if any) company name of an audit organisation.
REQUIREMENTS
for an application to take part in tentative selection
1. An audit organisation should provide the following data in an application to take part in tentative selection:
information about the audit organisation: form of legal incorporation, full and abbreviated (if any) company name, location, number and date of the certificate of state registration of this audit organisation;
information on the audit organisation’s officials or other employees authorised by the audit organisation to interact with the Bank of Russia (hereinafter, the authorised employee of the audit organisation) with the indication of their job titles, surnames, names, and patronymics (if any).
1.1. An audit organisation should provide the following data in the supplement to the application to take part in tentative selection:
on credit institutions (including credit institutions participating in bank groups or bank holdings), in which the audit organisation conducted audit inspections, including mandatory audit during last five years, preceding the moment of tentative selection (in accordance with the form of Annex 2 to Bank of Russia Regulation No.
on credit institutions, with which the audit organisation has concluded agreements to provide audit and (or) other services related to auditing and (or) to which it provided services related to auditing during last three years, preceding the moment of tentative selection (in accordance with the form of Annex 3 to Bank of Russia Regulation No.
on credit institutions from which the audit organisation has obtained loans during last five years, preceding the moment of tentative selection (in accordance with the form of Annex 4 to Bank of Russia Regulation No.
on the number of employees of the audit organisation, including those qualified to work in the bank audit, their record of service in auditing and in bank audit1.
A Russian audit organisation should provide the following data in the supplement to the application to take part in tentative selection:
information on the inclusion of the audit organisation in the register of auditors of the self-regulatory organisation of auditors, of which the audit organisation is a member (hereinafter, the register of auditors and audit organisations);
information on the parent and (or) subsidiary companies of the audit organisation (if any);
information on credit institutions, with which the parent and (or) subsidiary companies of the audit organisation (if any) concluded agreements on the provision of services related to auditing, and (or) to which they provided services related to auditing over the past three years preceding the date tentative selection, compiled in accordance with the form of Annex 3 to Bank of Russia Regulation No.
information on credit institutions, from which the parent and (or) subsidiary companies of the audit organisation (if any) obtained loans over last five years, preceding the moment of tentative selection, compiled in accordance with the form of Annex 4 to Bank of Russia Regulation No.
Information on the employees of a Russian audit organisation, possessing knowledge and experience in bank audit, shall additionally specify if such employees possess auditor qualification certificates enabling them to conduct bank audit, and also if they are members of self-regulatory organisations of auditors.
In the supplement to the application to take part in tentative selection a foreign audit organisation shall additionally provide the following:
information on organisations (if any) which, under the legislation of such audit organisation’s home country, are able to influence decisions taken by the audit organisation, or whose decisions the audit organisation is able to influence (hereinafter, the parent and (or) subsidiary companies of a foreign audit organisation);
information on credit institutions with which the parent and (or) subsidiary companies of a foreign audit organisation (if any) concluded agreements to provide other services related to auditing and (or) to which they provided services related to auditing over the last three years preceding the moment of tentative selection, compiled in accordance with the form of Annex 3 to Bank of Russia Regulation No.
information on credit institutions from which the parent and (or) subsidiary companies of the audit organisation (if any) obtained loans over last five years, preceding the moment of tentative selection, compiled in accordance with the form of Annex 4 to Bank of Russia Regulation No.
1.2. The audit organisation should also provide in the supplement to the application to take part in tentative selection documents (their copies) and information, required to confirm data provided and to assess the audit organisation’s compliance with the set criteria, including:
a copy (copies) of an insurance policy (insurance policies) on liability insurance of the audit organisation for violating an agreement on providing audit services and (or) causing damage to a third party’s property as a result of auditing;
a power of attorney of the audit organisation on the interaction of an authorised employee of the audit organisation with the Bank of Russia, if this employee is not indicated in the application to take part in tentative selection;
a written obligation of the audit organisation to provide the consents of its employees to be included in the group of auditors to the processing of their personal data by the Bank of Russia;
a written obligation of the audit organisation to comply with the requirements of restricted-access information (ensure information confidentiality) obtained from the Bank of Russia in the course of tentative selections and tenders (market analysis).
To confirm its unstained business reputation, a Russian audit organisation, among other things, submits a written recommendation of the self-regulatory organisation of auditors, of which such audit organisation is a member, or of another audit organisation, whose data are included in the register of auditors and audit organisations at least three years before the day of recommendation provision and which is not a founder (member) of this audit organisation and which is not included in its management bodies.
To confirm its business reputation, a foreign audit organisation, among other things, submits a written recommendation of another audit organisation.
2. Documents (their copies) and information submitted by the audit organisation to the Bank of Russia to take part in tentative selection should satisfy the following requirements:
they shall be compiled in Russian or accompanied by a translation into Russian certified according to the procedure set by the Russian Federation legislation (when submitting originals compiled fully or partially in a foreign language);
they shall be signed by (certified by a signature of) the sole executive body of the audit organisation (his/her deputies) (head of the audit organisation) and certified by the company’s seal imprint;
they shall be bound together, with all paged numbered (should the volume of documents (their copies) and information exceed one page).
An audit organisation shall submit documents on letter heads.
Files of documents (their copies) and information submitted in hard copy and in electronic format shall be compiled using the Microsoft Office package. Information submitted in electronic format shall be identical to information submitted in hard copy.
Documents (their copies) and information characterising the economic and financial standing of the audit organisation shall be additionally signed (certified by a signature) of the chief accountant of the audit organisation (his/her deputy).
All the documents and information submitted to the Bank of Russia by the audit organisation to take part in tentative selection shall be valid as of the date of their submission.
1 In addition to this, it is recommended to provide information on the number of employees of the audit organisation which are qualified and have experience in the provision of services linked to auditing and (or) services related to auditing, such as appraisal activities, property appraisal, appraisal of enterprises as property complexes, assessment of business risks, analysis of investment projects, and financial and business activities of organisations.
Information notice on the tentative selection of audit organisations to be entrusted by the Bank of Russia Board of Director to conduct inspections of credit institutions (branches thereof) will be published in Bank of Russia Bulleting No. 50, dated 10 June 2015.
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