Starting from 1 October 2018, the National Bank of Ukraine (hereinafter – the NBU) introduces a procedure to disqualify an audit firm from auditing a bank.
Under the Law of Ukraine On the Audit of Financial Statements and Audit Activity, which came into effect on 7 February 2018 and is to be put into force on 1 October 2018 (hereinafter – the Audit Law), the NBU’s right to keep the Register of audit firms that perform the external audit of banks has been revoked.
Instead, within three years of the day the Audit Law takes effect, the NBU gains the right to reject an audit firm selected by a bank for external audit or disqualify an audit firm that is already auditing a bank.
Pursuant to the Audit Law, the NBU approved the Regulation On the NBU Procedure for Rejection (Disqualification) of an Audit Firm Selected by a Bank for External Audit (hereinafter – the Regulation on Rejection).
The Regulation on Rejection defines, in particular, the following:
- procedure for informing the NBU by a bank about a selected audit firm for external auditing (after a tender procedure to select an audit firm)
- grounds for the NBU decision on the rejection (disqualification) of an audit firm selected by a bank
- procedure for the NBU decision on the rejection or disqualification of an audit firm (the decision is taken by the NBU Committee on Banking Supervision and Regulation and Oversight of Payment Systems)
- procedure for informing the bank and the Public Audit Activity Oversight Body, which is to be established pursuant to the Audit Law, on the NBU decision on the rejection (disqualification) of an audit firm.
The Regulation on Rejection was approved by NBU Board Resolution No. 89 dated 2 August 2018 and will be in force between 1 October 2018 and 6 February 2021. Pursuant to said Regulation, from 1 October 2018, the following regulations will be declared null and void: the RegulationOn Keeping the Register of Audit Firms Authorized to Audit Banks approved by NBU Board Resolution No. 410 dated 17 November 2011 registered with the Ministry of Justice of Ukraine under No. 1466/20204 on 19 December 2011 (as amended) and the Regulation On the Committee for the Audit of Ukrainian Banks approved by NBU Board Resolution No. 214 dated 6 April 2015 (as ammended).