Circular Letter CVM/SNC 01/04: Rotation of Independent Auditors

CIRCULAR LETTER/CVM/SNC No. 001/04
Rio de Janeiro, June 30, 2004.
SUBJECT: Article 31 of CVM Instruction No. 308/99 Rotation of Independent Auditors

Dear Sir,

This Circular Letter aims to directly obtain from independent auditors registered with this Securities and Exchange Commission (CVM) certain information related to the application of the rotation rule, provided for in Article 31 of CVM Instruction No. 308/99, with effects verified from 19/05/2004.

2. In this sense, considering the provisions of Article 9, item II of Law No. 6.385/76, we request that independent auditors, both natural persons and legal entities, submit to this Securities and Exchange Commission the information requested in the attached form, regarding:

a. open companies, incentivized companies, and other institutions, societies, or entities that participate in or integrate the securities market, such as: stock exchanges, securities brokers and distributors, investment funds, and other issuers of securities or securities instruments, regulated by the Securities and Exchange Commission, that entered the client portfolio due to compliance with the rotation rule, informing the respective contract date and the end date of the first period to be audited,

b. open companies, incentivized companies, and other institutions, societies, or entities that participate in or integrate the securities market, such as: stock exchanges, securities brokers and distributors, investment funds, and other issuers of securities or securities instruments, that ceased to be part of the client portfolio due to compliance with the rotation rule, informing the balance sheet date of the financial statements and the date of the last opinion or special review report issued, and

c. the total revenue value from audit services provided before rotation, the total revenue value from audit services provided, considering client entries and exits (after rotation), and the percentage variation of the client portfolio due to rotation, or

d. the information that there were no changes due to rotation (applicable in the case of independent auditors registered with the CVM who do not have clients in the securities market or in the case of independent auditors who have clients in the securities market, whose client portfolio has not changed).

3. It should be noted that the requested information is supplementary to the annual information of independent auditors (Article 16 of CVM Instruction 308/99) and must be sent within a maximum period of twenty (20) business days, counted from the date of receipt of this circular letter, under penalty of application of a daily coercive fine, in accordance with § 11 of Article 11 of Law No. 6.385/76, as provided in § 1, item I and § 3, of Article 1 of CVM Instruction No. 273, of 12/03/1998.

4. The requested information must be sent to the electronic address of the Audit Standards Management gna@cvm.gov.br, noting that, according to the attached model, the submission file must have the text format or extension ".doc". The text of this Circular Letter, as well as the model of the report, is available on this CVM's website, under "MARKET PARTICIPANTS/INDEPENDENT AUDITORS".

5. We also observe, opportune, that this request does not waive or exempt independent auditors from sending the Annual Information 2004, base year 2003 (Annex VI of CVM Instruction No. 308/99), whose deadline for delivery expired on 30/04/2004.

6. Any doubts may be clarified with the Audit Standards Analyst of this CVM, Eduardo Silva de Medeiros, by phone (21) 35548614.

Sincerely,

RONALDO CÂNDIDO DA SILVA
Audit Standards Manager

ANTONIO CARLOS DE SANTANA
Superintendent of Accounting and Audit Standards

Talk to CVM