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  • AU-3 AU-3 Auditor Reports

    • AU-3.1 AU-3.1 Review of Quarterly Prudential Information Returns

      • AU-3.1.1

        Conventional bank licensees must arrange for their auditors to review the licensee's quarterly Prudential Information Returns to the BMA, prior to their submission, unless otherwise exempted in writing by the BMA.

      • AU-3.1.2

        Conventional bank licensees are required to submit a quarterly Prudential Information Return (PIR). Conventional bank licensees may apply in writing to the BMA for an exemption from the requirement that the PIR be reviewed by the licensee's external auditors: this exemption would normally only be given where the licensee had established a track record of accurate and timely reporting, and there were no other supervisory issues of concern. Further details on the BMA's reporting and related requirements, including the precise scope of the auditor's review and attestation, are contained in Module BR (BMA Reporting).

    • AU-3.2 AU-3.2 Review of Financial Disclosures

      • AU-3.2.1

        Conventional bank licensees that are required to publish financial disclosures in accordance with Chapters PD-2 and PD-3 must arrange for their external auditors to review these prior to their publication, unless otherwise exempted in writing by the BMA.

      • AU-3.2.2

        Chapter PD-2 requires overseas conventional bank licensees operating as retail banks to publish on a semi-annual basis summary information on their balance sheet and profit and loss account, in the same format as their annual audited accounts. Chapter PD-3 requires all locally incorporated conventional bank licensees to publish quarterly financial statements, in accordance with International Accounting Standard 34 (Interim Financial Reporting).

    • AU-3.3 AU-3.3 Report on Compliance with Financial Crime Rules

      • AU-3.3.1

        Conventional bank licensees must arrange for their external auditors to report on the licensee's compliance with the requirements contained in Module FC (Financial Crime), at least once a year.

      • AU-3.3.2

        The report specified in Rule AU-3.3.1 must be in the form agreed by the BMA, and must be submitted to the BMA within four months of the licensee's financial year-end.

      • AU-3.3.3

        The context to the above requirement can be found in Section FC-4.3.

    • AU-3.4 AU-3.4 Review and Validation of internal models

      • AU-3.4.1

        Conventional bank licensees seeking BMA approval for their use of internal models for the calculation of regulatory capital requirements, must arrange for their external auditors to validate the soundness of the model concerned. This external review must be undertaken at least once a year, unless otherwise exempted in writing by the BMA.

      • AU-3.4.2

        Before granting its approval for Bahraini conventional bank licensees to use internal models for the measurement of market risk in the context of regulatory capital calculations, the BMA requires such models to be validated by both the internal and external auditors of the bank (see Chapter CA-9). The Agency will review the validation procedures performed by the internal and external auditors, and may independently carry out further validation procedures.

      • AU-3.4.3

        The specific requirements and procedures for external validation of models are contained in Section CA-9.8.

      • AU-3.4.4

        Exemptions from the external validation requirement are normally only given where a track record of satisfactory validations has been developed over several years, and where the BMA has no other material supervisory concerns regarding the licensee concerned.