Circular No. 2.676

CIRCULAR No. 002676 ------------------ Establishes complementary rules on independent auditing in financial institutions, other entities authorized to operate by the Central Bank of Brazil, investment funds constituted in the modalities regulated by the said Body and consortium administrators. The Collegiate Board of the Central Bank of Brazil, in a session held on 10.04.96, having regard to the provisions of art. 8, item IV, of Provisional Measure No. 1.334, of 12.03.96, and in art. 26, paragraph 3, of Law No. 6.385, of 07.12.76, as amended by art. 13 of the said Provisional Measure, and based on Resolution No. 2.267, of 29.03.96, D E C I D E D: Art. 1 Financial institutions, the other entities authorized to operate by the Central Bank of Brazil and the administrators of investment funds constituted in the modalities regulated by this Body and of consortium, when contracting or replacing independent auditing services referred to in art. 1 of Resolution No. 2.267, of 29.03.96, must inform the Regional Office of the Central Bank of Brazil to which they are subject, within 20 (twenty) days counted from the date of contracting, the following registration data of the auditor: I - name; II - address; III - CPF or CGC; IV - declaratory act of registration of the independent auditor with the Securities Commission - CVM. Paragraph 1 The communication referred to in this article regarding replacements must contain the reasons that determined the decision and the acknowledgment of the replaced auditor, who, in the event of non-compliance, must forward to this Body the justifications for their disagreement. Paragraph 2 The auditing services may be performed by an independent auditor - natural person or legal entity. Art. 2 The reports of the independent auditors on the work performed at the institutions and entities referred to in the previous article, as well as at the consortium administrators, must be issued within 30 (thirty) days from the date of effective delivery of the financial statements subject to the auditing services to the Regional Office of the Central Bank of Brazil to which the respective institution, entity or administrator is subject. Sole paragraph. For the investment funds constituted in the modalities regulated by this Body, the period referred to in this article shall be 30 (thirty) days after the base date of the financial statements of the fiscal year. Art. 3 The Central Bank of Brazil, based on verifications carried out directly or indirectly at the institutions, entities, funds and administrators mentioned in art. 1, may require the independent auditor to perform complementary examinations. Art. 4 The formalization of an administrative proceeding, by this Central Bank of Brazil, against independent auditors, in the face of occurrences considered as serious failures or irregularities, for acts practiced or omissions incurred in the performance of their activities, may result in: I - the examination of the accounting records, books
and documents of the independent auditors; II - the requirement that the independent auditors provide information or clarifications; III - the determination that the work performed by an independent auditor be reviewed by another. Sole paragraph. It is understood as a serious failure or irregularity, by act practiced or omission incurred, the non-observance, in the exercise of their activity, of the rules and procedures that regulate the professional activity of independent auditing, contained in acts issued or duly endorsed by the Federal Accounting Council, as well as the regulatory provisions issued by the National Monetary Council, by this Body and by the Securities Commission. Art. 5 The name of the administrator responsible for the monitoring, supervision and compliance with accounting and auditing rules and procedures (Director Responsible for the Accounting/Auditing Area), designated in the form of art. 7 of Resolution No. 2.267, of 29.03.96, must be communicated to the Regional Office of the Central Bank of Brazil to which the institution, entity or administrator is subject, within 20 (twenty) days from the publication of this Circular. Paragraph 1 The communication referred to in this article must be complemented by a declaration signed by the administrator, to be kept at the institution, entity or administrator at the disposal of the Central Bank of Brazil, that: I - is aware of their obligations; II - is responsible for the attributions provided for in art. 7 of Resolution No. 2.267, of 29.03.96. Paragraph 2 The responsible administrator, when summoned by the Central Bank of Brazil, must appear accompanied by the independent auditor. Paragraph 3 When there is a replacement of the person of the administrator referred to in this article, on the initiative of the administrator or of the institution, entity or administrator of which they are part, this decision must be communicated to the Regional Office of the Central Bank of Brazil to which they are subject, within 20 (twenty) days. Art. 6 The information referred to in art. 6 of Resolution No. 2.267, of 29.03.96, must be communicated to the Regional Office of the Central Bank of Brazil to which the audited institution, entity or administrator is subject. Art. 7 The penalties provided for in Law No. 5.768, of 20.12.71, and in Resolution No. 2.194, of 31.08.95, apply to the institutions, entities and administrators referred to in art. 1, in the event of non-compliance with the deadlines for information and updating of registration data stipulated in arts. 1 and 5, "caput" and paragraph 3. Art. 8 This Circular enters into force on the date of its publication. Art. 9. Circulars No. 580 of 19.11.80 and No. 1.957 of 10.05.91, item 2 of Circular No. 1.095 of 10.12.86, and items VII and VIII of art. 1 of Circular No. 1.561 of 29.12.88 are hereby revoked. Brasília, 10 April 1996. Alkimar Ribeiro Moura Cláudio Ness Mauch Director Director ------------------------------ Note: Retransmitted due to
an error in art. 7.