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Banks and Deposit Companies (Reporting Accountants) (Facts and Matters of Material Significance) Regulations 2006

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Banks and Deposit Companies (Reporting Accountants) (Facts and Matters of Material Significance) Regulations 2006
BANKS AND DEPOSIT COMPANIES (REPORTING
ACCOUNTANTS) (FACTS AND MATTERS OF MATERIAL
SIGNIFICANCE) REGULATIONS 2006


1



BR 59/ 2006

BANKS AND DEPOSIT COMPANIES ACT 1999

1999 : 40

BANKS AND DEPOSIT COMPANIES (REPORTING
ACCOUNTANTS) (FACTS AND MATTERS OF MATERIAL

SIGNIFICANCE) REGULATIONS 2006


The Minister of Finance, in exercise of the powers conferred by

section 60(1) of the Banks and Deposit Companies Act 1999 and acting
on the advice of the Authority, makes the following Regulations:

Citation and commencement
1 These Regulations may be cited as the Banks and Deposit
Companies (Reporting Accountants) (Facts and Matters of Material
Significance) Regulations 2006 and shall come into operation on the 15th
day of July, 2006.

Interpretation
2 In these Regulations —

“Act” means the Banks and Deposit Companies Act 1999;

“reporting accountant” means an auditor or an accountant who,
under section 39(2) or 46(4)(d) of the Act as the case may be,
is under a duty to give notice to the Authority of specified
facts or matters.

Facts and matters of material significance
3 (1) For the purposes of sections 39(2) and 46(4) of the Act,
where a reporting accountant —

BANKS AND DEPOSIT COMPANIES (REPORTING
ACCOUNTANTS) (FACTS AND MATTERS OF MATERIAL
SIGNIFICANCE) REGULATIONS 2006


2



(a) identifies a material misstatement in the financial
statements resulting from fraud, error or illegal acts or
the consequences of them;

(b) concludes that there is substantial doubt as to the
ability of the institution to continue as a going concern
for a period of one year from the balance sheet date;

(c) identifies adjustments to the financial statements which
individually or in aggregate indicate to him that the
previous year’s audited annual financial statements or
the current year’s unaudited interim financial
statements, prepared according to generally accepted
accounting principles issued to the shareholders were
materially misstated, or that the capital adequacy ratio
previously calculated for the previous financial year or
the current or prior interim period would fall below that
set as a minimum by the Authority;

(d) identifies a material weakness in internal control;

(e) has unresolved disagreements with management
pertaining to the application of generally accepted
accounting principles that could reasonably be expected
to lead in the future to material misstatements of the
annual or interim financial statements, prepared
according to generally accepted accounting principles to
be issued to the shareholders in the ensuing financial
year;

(f) identifies any evidence of deliberate attempts by a chief
executive or other senior executive to mislead the
Authority through the provision of materially false or
misleading information; or

(g) identifies evidence of fraud or attempted fraud by a chief
executive or other senior executive, or has concerns of
such a serious nature as to damage materially his
confidence in the integrity of the senior management of
the institution,

then those facts and matters are of material significance for the
discharge, in relation to the institution, of the Authority’s functions
under the Act.

(2) For the purposes of paragraph (1)(d), “material weakness in
internal control” means a deficiency in which the design or operation of
one or more of the internal control components of the institution does
not reduce to a relatively low level the risk that misstatements caused by
error or fraud in amounts that would be material in relation to the

BANKS AND DEPOSIT COMPANIES (REPORTING
ACCOUNTANTS) (FACTS AND MATTERS OF MATERIAL
SIGNIFICANCE) REGULATIONS 2006


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financial statements being audited may occur and fail to be detected
within a timely period by employees in the normal course of performing
their assigned functions.





Made this 21st day of June, 2006







Minister of Finance