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Location: Central Bank of Bahrain Volume 1—Conventional Banks > Part A > High Level Standards > AU Auditors and Accounting Standards > AU-3 Auditor Reports
  • AU-3 Auditor Reports

    • AU-3.1 Review of Quarterly Prudential Information Returns

      • AU-3.1.1

        Conventional bank licenseesG must arrange for their auditor to review the licensee's quarterly Prudential Information Returns to the CBB, prior to their submission, unless otherwise exempted in writing by the CBB. The review must be made in the form of an Agreed Upon procedures Report (as outlined in BR-3).

        Amended January 2011
        Amended January 2009
        October 2007

      • AU-3.1.2

        Conventional bank licenseesG are required to submit a quarterly Prudential Information Return (PIR). Conventional bank licenseesG may apply in writing to CBB for an exemption from the requirement that the PIR be reviewed by the licensee's external auditor: this exemption would normally only be given where the licensee had established a track record of accurate and timely reporting, and there were no other supervisory issues of concern. Further details on the CBB's reporting and related requirements, including the precise scope of the auditor's review and attestation, are contained in Module BR (The CBB Reporting).

        Amended: January 2011
        October 2007

      • AU-3.1.3

        For Bahraini conventional bank licenseesG , all existing exemptions in respect of PIR review as at 31st December 2014 will cease.

        Added: April 2015

    • AU-3.2 Review of Financial Disclosures

      • AU-3.2.1

        Conventional bank licenseesG that are required to publish financial disclosures in accordance with Chapters PD-2 and PD-3 must arrange for their external auditor to review these prior to their publication.

        Amended: July 2013
        Amended: January 2011
        October 2007

      • AU-3.2.2

        Chapter PD-2 requires overseas conventional bank licenseesG operating as retail banks to publish on a semi-annual basis summary information on their balance sheet and profit and loss account, in the same format as their annual audited accounts. Chapter PD-3 requires all locally incorporated conventional bank licensees to publish quarterly financial statements, in accordance with International Accounting Standard 34 (Interim Financial Reporting).

        October 07

      • AU-3.2.3

        Locally incorporated banks must arrange for their external auditor to review the annual disclosures required in Module PD, Section PD-1.3 and Chapter PD-6, prior to their submission to the CBB or their publication. This review must be in the form of an agreed- upon procedures report (see also PD-A.2.4). The report must be submitted to the CBB within 4 months of the year end of the concerned bank (see also Paragraph BR-1.1.3).

        Amended: July 2017
        Added: October 2011

      • AU-3.2.4

        Locally incorporated banks must arrange for their external auditor to review the disclosures in the half-yearly financial statements required by Module PD, Paragraph PD-3.1.6 prior to their submission to the CBB or their publication. This review must be in the form of an agreed upon procedure report. This report must be submitted to the CBB within 2 months of the end of the half-year reporting period of the concerned bank (see also Section BR-2.2).

        Amended: January 2016
        Added: October 2011

    • AU-3.3 Report on Compliance with Financial Crime Rules

      • AU-3.3.1

        Conventional bank licenseesG must arrange for their external auditor or a consultancy firm approved by the CBB as per Paragraphs FC-4.3.2 and FC-4.3.2A, to report on the licensee's compliance with the requirements contained in Module FC (Financial Crime), at least once a year.

        Amended: July 2013
        Amended: January 2011
        October 2007

      • AU-3.3.2

        The report specified in Rule AU-3.3.1 must be in the form agreed by the CBB, and must be submitted to the Compliance Directorate at the CBB by the 30th of April of the following year (See Paragraph FC-4.3.5).

        Amended: April 2011
        October 07

      • AU-3.3.3

        The context to the above requirement can be found in Section FC-4.3.

        October 07

    • AU-3.4 Review and Validation of Internal Models

      • AU-3.4.1

        Conventional bank licenseesG seeking the CBB approval for their use of internal models for the calculation of regulatory capital requirements, must arrange for their external auditor to validate the soundness of the model concerned. This external review must be undertaken at least once a year, unless otherwise exempted in writing by the CBB.

        Amended: January 2011
        October 2007

      • AU-3.4.2

        Before granting its approval for Bahraini conventional banksG to use internal models for the measurement of market risk in the context of regulatory capital calculations, the CBB requires such models to be validated by both the internal and external auditors of the bank (see Chapter CA-9). The CBB will review the validation procedures performed by the internal and external auditors, and may independently carry out further validation procedures.

        Amended: January 2011
        October 2007

      • AU-3.4.3

        The specific requirements and procedures for external validation of models are contained in Section CA-9.8.

        October 07

      • AU-3.4.4

        Exemptions from the external validation requirement are normally only given where a track record of satisfactory validations has been developed over several years, and where the CBB has no other material supervisory concerns regarding the licensee concerned.

        October 07

    • AU-3.5 Report on Material Differences

      • AU-3.5.1

        Conventional bank licenseesG must arrange for their external auditor to provide to the CBB explanations for any material differences in data reported in the bank's audited or reviewed accounts and in the Prudential Information Returns (PIR).

        Amended: April 2014
        Amended: April 2011
        Added: January 2011

    • AU-3.6 Report on Compliance with Remuneration Rules

      • AU-3.6.1

        Unless specifically excluded in accordance with Paragraph AU-3.6.3, conventional bank licenseesG must arrange for their external auditor or a consultancy firm approved by the CBB as per Paragraph BR-4A.3.2, to report on the bank's compliance with the requirements contained in Chapter HC-5, at least once a year.

        Amended: July 2015
        Amended: July 2014
        Added: January 2014

      • AU-3.6.2

        The report specified in Rule AU-3.6.1 must be in the form agreed by the CBB, and must be submitted by the bank to the supervisory point of contact at the CBB when the audited financial statements are submitted, i.e. within 3 months of the bank's year end (See Section BR-4A.3).

        Amended: July 2014
        Added: January 2014

      • AU-3.6.3

        Where a conventional bank licenseeG has no:

        (a) Approved personsG ; or
        (b) Material risk-takersG

        whose total annual remunerationG (including all benefits) is in excess of BD100,000, Paragraph AU-3.6.1 does not apply. In this instance, an annual notification must be sent to the CBB once it is determined that this situation applies.

        Added: July 2014

    • AU-3.7 Report on Eligible Accounts for the Deposits/Unrestricted Investment Accounts Protection Funds

      • AU-3.7.1

        Conventional bank licenseesG must arrange for their external auditor to confirm the accuracy of the data reported on the Eligible accounts report for the deposits/unrestricted investment account protection funds (Appendix BR-16) as required under Paragraph BR-1.4.2.

        Added: April 2014

      • AU-3.7.2

        The report from the external auditor required under Paragraph AU-3.7.1 must be submitted to the CBB at the same time as the due date for Appendix BR-16, that is, two months after the financial year end.

        Added: April 2014

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