Norm Reforming Articles 1, 8, and 28 of the Standard on Internal Control and Internal Audit of Banks and Financial Companies

Resolution No. CD-SIBOIF-1129-1-SEP10-2019
Dated September 10, 2019
STANDARD REFORMING ARTICLES 1, 8, AND 28 OF THE STANDARD ON INTERNAL CONTROL AND INTERNAL AUDIT OF BANKS AND FINANCIAL COMPANIES

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I
That on July 11, 2012, the Standard on Internal Control and Internal Audit of Banks and Financial Companies was approved, contained in Resolution No. CD-SIBOIF-736-1-JUL11-2012, published in La Gaceta, Official Gazette No. 168 of September 4, 2012, which aims to regulate the scope of internal audits and establish guidelines for the board of directors of the financial institution through its Internal Audit Unit to permanently oversee the efficiency of internal control systems and compliance with policies and procedures, with the aim of minimizing risks, using the principles established in this standard and generally accepted audit techniques.

II
That it is necessary to modify the provisions contained in Articles 1, 8, and 28 of the aforementioned standard, regarding the main functions of the Audit Committee concerning financial statements and external auditor reports, in order to adapt these articles to the accounting framework applicable to banks and financial institutions, as well as to updates to International Standards on Auditing, among other aspects.

III
That in accordance with the foregoing and based on the powers established in Article 10, subsections 2) and 10) of Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions, and its reforms, contained in Law No. 974, Law of the Nicaraguan Legal Digest of the Banking and Finance Sector, published in La Gaceta, Official Gazette No. 164, of August 27, 2018, and its reforms.

In exercise of its powers,

HAS ISSUED

The following,

Resolution No. CD-SIBOIF-1129-1-SEP10-2019
STANDARD REFORMING ARTICLES 1, 8, AND 28 OF THE STANDARD ON INTERNAL CONTROL AND INTERNAL AUDIT OF BANKS AND FINANCIAL COMPANIES

FIRST: Articles 1, subsection n); 8, subsection h); and 28, subsections a), numeral 1, and b), numerals 1 and 4, of the Standard on Internal Control and Internal Audit of Banks and Financial Companies, contained in Resolution No. CD-SIBOIF-736-1-JUL11-2012, of July 11, 2012, published in La Gaceta, Official Gazette No. 168 of September 4, 2012, are hereby amended, which shall read as follows:

“Article 1. Definitions.- For the purposes of this standard, the terms indicated in this article, whether in uppercase or lowercase, singular or plural, shall have the following meanings:
… n) Accounting Framework: Accounting Framework for Banking and Financial Institutions.
…”

“Article 8. Functions of the Internal Audit Unit.- The Internal Audit Unit shall have the following minimum functions:
… h) Evaluate the sufficiency, effectiveness, and compliance of the integrated system for the prevention and management of money laundering, asset forfeiture, terrorist financing, and financing of the proliferation of weapons of mass destruction, in accordance with the current legal and regulatory provisions specific to conducting the independent audit or evaluation of the AML/CFT/CPF matter. …”

“Article 28. Main Functions of the Audit Committee.- The audit committee shall have the following functions:
a) Regarding financial statements: Review the financial statements at the end of the period, with the general manager or chief executive and with the external auditors themselves, in order to determine:

1. Whether they are presented in accordance with the Accounting Framework.
   … b) Regarding external auditor reports: Review the result of the engagement of the external auditors with themselves, considering:
2. The content of the audit report, especially any limitation on the scope of work or other matter that might have resulted in a modified opinion.
   …
3. Any difference of opinion between management and external auditors, regarding the Accounting Framework, treatment of specific transactions or events, disclosures in the financial statements, and adjustments resulting from the audit engagement.
   …
   …”

SECOND: This standard shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (F) S. Rosales C. (F) Illegible (Luis Ángel Montenegro E.) (F) Fausto Reyes R. (F) Illegible (Silvio Moisés Casco Marenco) (F) Illegible (Rafael Ángel Avellán Rivas).

RAFAEL ÁNGEL AVELLÁN RIVAS
Secretary of the Board of Directors SIBOIF