The Board is responsible for overseeing the necessary controls to ensure the soundness and accuracy of the financial reports, including:
a.
Overseeing the financial statements, financial reporting and disclosure process.
b.
Assessing the effectiveness of the accounting policies and practices.
c.
Overseeing the internal audit process (reviews by internal audit of the Company’s financial reporting controls) and reviewing the internal auditor’s plans and material findings.
d.
Significant findings and observations regarding the weakness in the financial reporting process are promptly rectified. This should be supported by a formal process for reviewing and monitoring the implementation of recommendations by the external auditor.
e.
Reporting to the Central Bank on significant issues regarding the financial reporting process, and the remedial action taken in this regard.
3.
The Board is responsible for ensuring the sound governance and oversight of the external audit process, including:
a.
Approving, recommending, appointing, reappointing, dismissing and determining the compensation of the external auditor.
b.
Ensuring the independence of the external auditor through robust processes to ensure that the appointed external auditor has the necessary knowledge, skills, expertise, integrity and resources to conduct the audit and meet any additional regulatory requirements.
c.
Assessing the effectiveness of the external audit.
d.
Investigating circumstances of resignation or removal of the external auditor, and reporting the same to the Central Bank.
4.
The Board must ensure an effective relationship with the external auditor, through:
a.
Setting clear and adequate terms of engagement of the external auditor, along with a defined scope of work and resources required to conduct the audit. For this purpose the Board must ensure that the terms of engagement of the external auditor are clear and appropriate to the scope of the audit and resources required to conduct the audit and specify the level of audit fees to be paid.
b.
An undertaking by the external auditor that the audit is going to be conducted according to the applicable legislation and international standards.
c.
Ensuring that the external auditor complies with internationally acceptable ethical and professional standards.
d.
Ensuring that there are adequate policies to ensure the independence of the external auditor, including restrictions and conditions for the provision of non-audit services which are subject to approval by the Board, periodic rotation of members of the audit team and/or audit firm and the provision of safeguards to eliminate or reduce to an acceptable level identified threats to the independence of the external auditor.
e.
Ensuring that there is unrestricted access to information or persons to conduct the audit.
5.
The Board must have effective communication with the external auditor, including scope and timing of the audit to understand the nature of risk. The Board should hold regular meetings with the external auditor without the presence of Senior Management, and all internal audit weaknesses must be identified and communicated.
6.
The Company must provide the Central Bank with the external auditor’s report.
7.
The external auditor must promptly report to the Central Bank without the prior consent of the Company on all matters that are likely to be of material significance, such as breaches of applicable legislation, fraud or the suspicion of fraud.