Regulatory Alerts2015-04-30
Added · Updated
DFIM Circular No. 04: Appointment of external auditors in financial institutions
Financial Institutions in Bangladesh must obtain Bangladesh Bank approval before appointing external auditors and comply with attached guidelines regarding auditor qualifications, such as requiring at least one chartered accountant with ten years of experience and imposing a three-year rotation rule. The circular mandates that audit firms declare no conflicts of interest with the institution's ownership and requires auditors to scrutinize reports for compliance with specific laws and regulations, including verifying that at least 80% of risk-weighted assets are audited. External auditors are obligated to immediately inform Bangladesh Bank of severe violations, criminal offenses, or if minimum required capital decreases by 25%, and must submit management reports to the regulator within one month of audit completion. This circular voids the instructions contained in FID Circular no. 03 dated 02 March, 1999.
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