Resolution CMN No. 1007 - Financial Institutions and Other Entities Authorized to Operate by the Central Bank Must Have Their Financial Statements Audited by Independent Auditors Registered with the Securities and Exchange Commission

RESOLUTION NO. 001007

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on this date, having regard to the provisions of Articles 3, items V, VI, and VII, and 4, items VI, VII, VIII, and IX, of the aforementioned Law, as well as Articles 2, item V, 28, and 29 of Law No. 4,728, of July 14, 1965, and Article 3, items III and IV, of Law No. 6,385, of December 7, 1976,

RESOLVES:

I - Financial institutions and other entities authorized to operate by the Central Bank must have their financial statements audited by independent auditors registered with the Securities and Exchange Commission.

II - The obligation set forth in the preceding item refers to the financial statements required by current legislation, prepared on the last business day of the months of June and December.

III - The institutions referred to are obliged to preserve, for a minimum period of 5 (five) years, the audit opinion and the reports referred to in item VIII, as well as other documents related to the audit performed.

IV - The companies referred to in item I, when hiring audit services, must inform the Central Bank of Brazil - Department of Registration and Information of the name of the hired auditor. Whenever there is an interruption in the provision of these services, the fact must be communicated by a statement signed by the audited institution, which must contain the auditor's consent. If the auditor does not agree with the statement, the auditor will send to the Central Bank the justifications for their disagreement.

V - Any flaws and irregularities found by the Central Bank's supervision, in the work performed by the auditors, will be the subject of communication to the Federal Council of Accounting and to the Securities and Exchange Commission, in a properly documented process to enable the determination of responsibilities and, if applicable, the initiation of the appropriate administrative inquiry.

VI - The Central Bank may, at any time, temporarily suspend the performance of audit work, in institutions authorized by it to operate, by auditors whose performance, in its discretion, is not compatible with the interests of security and strengthening of the financial system, during the period in which the Securities and Exchange Commission and the Federal Council of Accounting are reviewing, within their areas of competence, the flaws and irregularities found by the Central Bank's supervision.

VII - In the performance of the mandatory audit services referred to in item I, the "General Audit Standards" and the "Generally Accepted Accounting Principles and Conventions" must be uniformly observed, as well as the pertinent acts issued by the Central Bank and the Securities and Exchange Commission.

VIII - The independent auditor, as a result of the examination of the books, accounting records, and documents of the audited institution, will present:

a) an audit opinion regarding the financial position and the result of the term;

b) a detailed report of its observations regarding the deficiencies or inefficacy of the internal accounting controls exercised;

c) a detailed report regarding the non-compliance with legal and regulatory norms.

IX - The independent auditor will send to the Central Bank - Central Supervision Department or Regional Unit that has jurisdiction over the audited institution -, within 10 (ten) days after the conclusion of its semi-annual audit work, a copy of the documents mentioned in the previous item and of any other documents delivered to the audited company as a result of the audit work performed.

X - The audit opinion on the financial statements prepared by the institutions cited in item I does not exclude or limit the supervisory action of the Central Bank.

XI - The Central Bank and the Securities and Exchange Commission, insofar as it pertains to them, may adopt the measures deemed appropriate and issue complementary norms that prove necessary for the execution of this Resolution.

XII - This Resolution will enter into force on the date of its publication, with Resolutions Nos. 413, of January 24, 1977; 607, of April 2, 1980; 670, of December 17, 1980; and 804, of March 10, 1983, being revoked.

Brasilia-DF, May 2, 1985

Antônio Carlos Braga Lemgruber
President