Angola – Banking regulations – External Auditor

The Angolan Central Bank (BNA) released a new regime for the provision of external audit services to financial institutions by way of Order 12/23, of 4 December 2023. Below is an outline of the new regime:

  • BNA Order 12/23 is applicable to the financial institutions operating in Angola and the holding companies which are subject to BNA supervision under the Financial Institutions Law (Law 14/21, of 19 May 2021);
  • Financial institutions must be audited by an External Auditor at least once a year, except in the case of banks which must be audited every six months. In addition, BNA may request extraordinary audits at any time;
  • The External Auditor is appointed on the basis of a proposal submitted by the financial institution’s Audit Committee which is approved by the Shareholders Meeting. The contract with the External Auditor is entered into by the Board of Directors;
  • The External Auditor of banks must be an audit firm licensed to operate in Angola under the Audit and Accounting Regulations, Law 3/01, of 23 March 2001;
  • The External Auditor of non-banking financial institutions may be an audit firm or an individual auditor licensed under the same regulations (unless the institution’s annual turnover exceeds Kz.,00 in which case an audit firm must be appointed);
  • The External Auditor must produce reports on:
    • The financial statements;
    • Other accounting matters to be defined in specific legislation.
  • The audit report prepared by the External Auditor must be attached to the respective financial statements and submitted to the Shareholders Meeting for approval at least 30 days in advance;
  • The External Auditor must inform BNA of any issues which may impact its audit report, and otherwise must report to and discuss with BNA any adverse findings;
  • The External Auditor must prepare and submit to BNA a comprehensive report on the audited financial statements, which must include the minimum information listed in Order 12/13.
  • The main focal point of the External Auditor within the financial institution is the Audit Committee;
  • The External Auditor must be totally independent in performing its work, which includes respecting, inter alia, the following principles:
    • The External Auditor cannot provide to the financial institution, during the audit period or in the prior 12 months, any tax advisory or reporting services, preparation of financial statements, bookkeeping, salary processing, internal controls and risk management, legal services, human resources services, cost control, among others, and otherwise it cannot participate in any management decisions of the financial institution;
    • The External Auditor cannot have any, direct or indirect, financial interest in the financial institution;
    • The External Auditor cannot be a member of, or otherwise participate in any management body of the financial institution, including those responsible for compliance, internal auditing and risk management.
  • The audit teams cannot include any person who has served in a statutory body of the financial institution in the 24 months prior to the auditing work;
  • Financial institutions must change their External Auditor after a maximum of 4 years. A minimum period of 4 years must lapse before the same External Auditor can be reappointed;
  • BNA may request that a financial institution changes its External Auditor in case:
    • the External Auditor does not have the aptitude, capacity or experience required to performed the job;
    • the External Auditor is not independent;
    • the mandatory reports have not been produced through fault of the External Auditor.

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