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Conditions and Rules for Registering Accounting Offices and Auditors in the Central Bank’s Register

First: Conditions and Rules for Registering Accounting Offices in the Central Bank’s Register

-1 The office must not take the form of a sole proprietorship.

-2 The number of partners in the office must not be less than two partners, each of whom is an auditor registered with the Central Bank.

-3 The company’s license must be issued by the Ministry of Investment.

-4 The name of the office and the professional title / designation must not be the same as or similar to another office registered in Egypt.

-5 The initial license must be secret and accompanied by a document proving the basic capital from the Ministry of Finance.

-6 Completion of the form and declaration issued for this purpose.

-7 Payment of an amount of 50,000 Egyptian Pounds for the study and examination service for registration with the Central Bank, and an amount of 25,000 Egyptian Pounds for renewal of registration every 5 years, and in the case of a request to cancel registration, an amount of 2,000 Egyptian Pounds is paid.

Second: Conditions and Rules for Registering Auditors in the Central Bank’s Register

A- General Conditions for Registration:

-1 Must be of Egyptian nationality.

-2 Must possess full civil capacity.

-3 Availability of the following managerial and technical conditions for auditors:

1-3 Integrity, honesty, and good reputation, and proof of no previous criminal record or disciplinary decisions from the Bar Association or the Egyptian Society of Accountants and Auditors.

2-3 Must hold one of the following:

• A Bachelor’s degree in Accounting from an Egyptian university or an accredited foreign university, or a degree recognized by the Supreme Council of Universities.

• A postgraduate diploma in Accounting or Auditing in the case of holding a Bachelor’s degree in other than Accounting.

• A PhD in Accounting or Auditing from an Egyptian university or an accredited foreign university, or a degree recognized by the Supreme Council of Universities.

• A Certified Public Accountant (CPA) or Certified Management Accountant (CMA) or Certified Internal Auditor (CIA) or ACCA, and these conditions are primarily required in the case of wishing to audit bank accounts.

3-3 Must be a member of the Egyptian Society of Accountants and Auditors or the Egyptian Syndicate of Accountants and Auditors.

4-3 Must be registered in the register of auditors maintained by the Central Bank of Egypt for accountants.

5-3 The applicant for registration must be registered in any of the following:

• The register of auditors at the Financial Regulatory Authority.

• The official register of accountants and auditors at the Ministry of Finance for accountants and auditors in the case of being a partner in an authorized audit firm, and the number of partners who have retired from auditing or are partners in auditing must not exceed 25 partners, within a period not less than five years.

-4 The auditor must have a team of employees and associates of at least six employees, of which at least three must be auditors or partners in an authorized audit firm.

-5 The application for registration with the Central Bank for auditors is submitted through the accounting office that employs him.

-6 Completion of the form and declaration issued for this purpose.

-7 Payment of an amount of 10,000 Egyptian Pounds for the study and examination service for registration, and an amount of 5,000 Egyptian Pounds for renewal of registration every 5 years, and in the case of a request to cancel registration, an amount of 1,000 Egyptian Pounds is paid.

-8 The approval of the auditor’s registration is valid for five years, subject to renewal, and the renewal of registration for the expired period requires a period of at least 30 days. The application must be submitted before the expiration.

B- Additional Conditions Specific to Bank Auditors:

-1 Participation in the audit of financial statements as an external auditor for the Central Bank for a period of at least five years.

-2 Must have held or participated in the audit of at least one authorized firm within the last five years.

-3 Obtaining specialized training through specialized courses at least once a year: The Egyptian Banking Institute, the Financial Regulatory Authority... provided that the training is within the scope of the responsibilities assigned to auditors, and includes the following:

• The mandatory guidelines for banks regarding the classification of loans and advances, credit and investment risks, and asset risks.

• The adequacy of the organization of internal controls in the bank at all its levels.

-4 Completion of the form and declaration issued for this purpose.

Third: General Rules for Accounting Offices and Auditors

-1 The bank auditor must be different from the accounting office.

-2 The auditor’s tenure for auditing bank accounts must not exceed five years, and the accounting office’s tenure for auditing the bank must not exceed three years, and the rotation of the auditor and the accounting office must occur again after a period of at least four years without extending the tenure for auditing bank accounts.

-3 The auditor’s tenure for auditing accounts of other banks supervised by the Central Bank must not exceed three years, and the accounting office’s tenure for auditing those accounts must not exceed two years, and the rotation of the auditor and the accounting office must occur again after a period of at least four years without extending the tenure for auditing those accounts, unless those periods are extended according to the provisions of the licensing, supervision, and oversight regulations for exchange companies and the regulations governing investment and classification companies.

-4 The auditor and his team and associates must commit to continuous professional training and education, for at least 40 hours each year, through the Egyptian Banking Institute, the Financial Regulatory Authority, the Egyptian Society of Accountants and Auditors, or any institution approved by the Central Bank.

-5 The auditor and his team and associates must commit to the Egyptian Standards for Auditing and Limited Assurance and Other Assurance Services, the professional ethics and conduct of the accounting and auditing profession, as well as the rules for preparing and presenting financial statements for banks, and the accounting and auditing standards issued by the Central Bank and any instructions issued in this regard, in auditing bank accounts.

-6 The registration request must be submitted within 30 days from the date of issuing the request, complete and satisfying the conditions and documents.

-7 A certificate is issued to each registered auditor and the accounting office registered with the Central Bank, valid for a period determined by those instructions.

-8 Accounting offices and auditors must commit, insofar as it relates to disclosure, transparency, and conflict of interest:

1-8 Disclosure and notification of any significant or material events in a timely manner, including:

1-1-8 Discovering any information that affects the reliability of the audit report, or affects the interest, or any defect in the organization of internal controls.

2-1-8 The management of any activities that affect the independence or objectivity.

2-8 Avoidance of conflict of interest, and the following are prohibited:

1-2-8 Practicing the profession in a manner that contradicts professional ethics and standards, or the laws and regulations in force in the country.

2-2-8 Providing any services that contradict the audit being performed.

3-2-8 Not having a financial interest or joint interest in the entity being audited or any of its related parties.

4-2-8 Not being a partner in the audit of the entity being audited with any of the following:

• Participating in the establishment or management of the entity or a company with a permanent or contingent liability to the entity for a period not less than two years.

• Being a partner or one of the partners or one of the associates of the office, a partner in the authorized audit firm, or a relative or employee of any of them.

• Not being with any entity that was audited for a period not less than three years before the start of the audit period.

3-8 The accounting office must obtain the Central Bank’s approval in the following cases:

1-3-8 Admission of any partner to the office.

2-3-8 The office obtaining a license from an external auditor.

4-8 The accounting office must notify the Central Bank when a partner resigns.

5-8 The office/auditor must notify the Central Bank of any changes affecting the relevant documents within 30 days from the date of occurrence of such change.

6-8 The auditor must sign the financial statements on behalf of the registered accounting office with the Central Bank, and in the case of changing the office’s name, explicit approval must be obtained from the Central Bank before the new office’s name.

Fourth: Disciplinary Accountability for Accounting Offices and Auditors

The Central Bank takes disciplinary measures against any of the accounting offices or auditors who commit any of the following violations:

• Providing false or inaccurate documents contrary to the conditions and rules of registration.

• Failure to comply with the guidelines and responsibilities assigned to the external auditor supervised by the Central Bank, or issuing reports contrary to the Central Bank’s guidelines and the Egyptian Standards for Auditing and Limited Assurance and Other Assurance Services, or the mandatory professional ethics or professional conduct.

• Providing any service or acting in a manner that undermines professional supervision and leads to harm.

• Issuing a criminal judgment against the auditor in a misdemeanor or any crime violating professional ethics or accounting, or any of the crimes stipulated in the Central Bank and Banking Law supervised by it, or in the Anti-Money Laundering Law issued under Law No. 80 of 2002, and the disciplinary decisions include the following:

-1 Issuing a Warning:

The Central Bank’s Board of Directors may issue a warning to the registered accounting office or auditor during the period of occurrence of the violation, or in any of the registers in the case of violating the registration conditions or the applicable standards, the Egyptian Standards for Auditing and Limited Assurance and Other Assurance Services, or the mandatory professional ethics or professional conduct, and it is accompanied by a notice specifying the time limit to eliminate the consequences of that violation for a maximum of six months from the date of the warning, and the period may be extended for a maximum of one year upon the submitted requests.

-2 Temporary Suspension of Registration in the Register:

The Central Bank’s Board of Directors may temporarily suspend the registration of the registered accounting office or auditor in the register in the case of not eliminating the violation or rectifying it, or violating those instructions, or violating any of the Egyptian Standards for Auditing and Limited Assurance and Other Assurance Services, or the mandatory professional ethics or professional conduct, and the suspension is for a period ranging from one to three years.

-3 Deletion from the Register:

The Central Bank’s Board of Directors may delete the registered accounting office or auditor from the register in the case of the occurrence of any of the following:

• The accounting office stops practicing the activity or is liquidated.

• The accounting office/auditor submits a request to remove his name from the register.

• Loss of any of the registration conditions in the Central Bank’s register.

• Issuance of a decision to temporarily suspend the office or auditor in another case.

• Issuance of a criminal judgment against the accounting office or auditor in a misdemeanor or any crime violating professional ethics or accounting, or any of the crimes stipulated in the Central Bank and Banking Law or the Anti-Money Laundering Law supervised by it, or violating the issuance of a reliable report for the Egyptian Standards for Auditing and Limited Assurance and Other Assurance Services, or the mandatory professional ethics or professional conduct.

Except for the cases mentioned in the clauses (d, e), the registration of the accounting office/auditor whose name was previously deleted from the register may be prepared, but only in the case of the elimination of the reason for deletion, and in clause (e) based on a request submitted by the owner of the interest.

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