CVM/SNC Circular Letter 03/01: External Quality Control Program

CIRCULAR LETTER/CVM/SNC No. 03/01.
Rio de Janeiro, September 28, 2001.
Subject: External Quality Control Program

Dear Sir,

Articles 32 and 33 of CVM Instruction No. 308/99 establish that independent auditors must implement an internal quality control program, in addition to submitting their quality control to review, which will be carried out by another independent auditor.

2. It should be noted that, in a plenary meeting held on 09/12/2001, the Federal Council of Accounting approved Resolution CFC No. 910/01, regulating the external quality review program, establishing forms of procedure and deadlines to be met by independent auditors to comply with the aforementioned standard. This Resolution was published in the Official Gazette of the Union on 09/14/2001.

3. Considering the provisions of the aforementioned Resolution and to comply with Article 33 of CVM Instruction No. 308/99, we communicate that the first external quality review must occur within the following deadlines:

a. for the 10 (ten) firms or individual auditors with the highest number of publicly traded company clients, by December 31, 2001; b. for the next 50 (fifty) firms or individual auditors, applying the same criterion, by June 30, 2002, and
c. for the remaining firms or individual auditors by October 31, 2002.

4. In view of the above and considering the Periodic Information regarding the year 2001, base year 2000, submitted to this Autarchy, we inform you that, in your case, the deadline for carrying out the first external quality review must occur by October 31, 2002.

5. We also remind you that, according to the provisions of paragraph 2 of Article 33 of CVM Instruction No. 308/99, the reviewing auditor must send a copy of the quality control review report to the CVM by October 31 of the year in which the review is carried out.

6. We highlight that failure to observe the deadlines mentioned in paragraph 3 above will result in the application of a penalty fine in accordance with CVM Instruction No. 273/98.

7. We also inform you that Resolution CFC No. 910/01 can be obtained on the site http://www.cfc.org.br, or on our site, http://www.cvm.gov.br/normas contábeis e de auditoria/auditores independentes/resumo das normas de registro/controle de qualidade externo.

Sincerely,

ANTÔNIO CARLOS DE SANTANA
Superintendent of Accounting Standards and Auditing

Independent Auditors whose first External Quality Review must occur by October 31, 2002:

ALL OTHER INDEPENDENT AUDITORS, REGISTERED WITH THE CVM AS INDIVIDUALS OR LEGAL ENTITIES, WHOSE NAME OR BUSINESS NAME DOES NOT APPEAR IN THE LISTS ATTACHED TO CIRCULAR LETTERS/CVM/01/01 AND 02/01, MUST UNDERGO THE FIRST EXTERNAL QUALITY REVIEW BY 10/31/2002.

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