The new guidelines aim to streamline the selection process for external auditors across the financial sector and promote ease of doing business, the BSP announced in a statement on Wednesday.
The policy introduces the adoption of a centralized system for accreditation/selection of external auditors in the financial sector streamlining the multiple accreditation requirements of the BSP, the Securities and Exchange Commission (SEC) and the Insurance Commission (IC).
Following the new framework, all applications (new or renewal) for inclusion in the List of Selected External Auditors for BSFIs shall be submitted to the SEC starting June 2019. The applications shall be evaluated by the SEC in coordination with the BSP and shall be subject to the requirements the agencies agreed upon.
The inclusion in the List of Selected External Auditors for BSFIs shall be valid for five years or for a shorter period the financial sector supervisors’ prescribed.
To facilitate transition to the new framework, external auditors whose inclusion in the BSP's List of Selected External Auditors is valid only for the 2018 financial statements, are given a one-year extension to allow them to engage in the audit of the 2019 financial statements of BSFIs.
The centralized system for selection/accreditation of external auditors is a project of the Financial Sector Forum (FSF), a voluntary inter-agency body comprised of the BSP, SEC, IC and the Philippine Deposit Insurance Corporation.
The FSF member-agencies recognize the critical role of external auditors in promoting good governance in the financial industry as they contribute to upholding fairness, accuracy and transparency in financial reporting.
It is in this light that the FSF has been embarking on initiatives aimed at promoting adherence to quality standards in external audit.