Azerbaijan, Baku / Trend corr I. Khalilova / The administration of National Bank of Azerbaijan (NBA) has approved new regulations on the requirements of foreign audit for banks and the local branches of foreign banks. The head of the Methodology Section of the Department on Control over Activities of Credit Organizations at NBA, Vugar Hajiyev, who presented the document, noted the importance of the regulations and said that they had been developed jointly with the Ministry of Justice and Accountancy Chamber of Azerbaijan.
The regulations have been developed in accordance with the Law on Banks, the law on NBA, the Law on Audit Activities, the Law on Audit Service, and the guidelines of Basel Committee, the International Jury Federation, International Audit and Standardization Union, et cetera.
According to Hajiyev, foreign audits may be held either by the initiative of banks or the NBA. The main requirement put forwards by NBA is the development of bank accounting in compliance with international standards. In several cases when international standards do not correspond to the local standards, national legislation is preferred.
An innovation is the regulation which requires the estimation of correspondence of bank activities to corporative management standards defined by NBA. An obligatory requirement is also to inform NBA of serious breaches in banks revealed during the audit.
An additional requirement for auditors is to develop a report for the administration of a bank, which will lead to the increase in payments for audit services. Banks must submit audit accounts and administration reports to the NBA by the end of May. Reports on the elimination of disadvantages revealed by foreign audits must be submitted to NBA within 6 months.
Should NBA not be satisfied with the results of the audit, it may hold another audit.