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  • AA-1.5 AA-1.5 Licensee/Auditor Restrictions

    • Financial Transactions with Auditors

      • AA-1.5.1

        Insurance licensees must not provide regulated insurance services to their auditors, including entering into any contracts of professional indemnity insurance with their auditors.

        Amended: January 2007

    • Outsourcing to Auditors

      • AA-1.5.2

        Insurance licensees may not outsource their internal audit function to the same firm that acts as their external auditor.

        Amended: April 2013
        Amended: January 2007

    • Other Relationships

      • AA-1.5.3

        Insurance licensees and their auditors must comply with the restrictions contained in Article 217(c) of the Commercial Companies Law (Legislative Decree No. (21) of 2001), as well as in Article 61(d) of the CBB Law.

        Amended: January 2007

      • AA-1.5.4

        Article 217(c) prohibits an auditor from (i) being the chairman or a member of the Board of Directors of the company he/she audits; (ii) holding any managerial position in the company he/she audits; and (iii) acquiring any shares in the company he/she audits, or selling any such shares he/she may already own, during the period of his audit. Furthermore, the auditor must not be a relative (up to the second degree) of a person assuming management or accounting duties in the company.

        Amended: January 2007
        Amended: October 2007

      • AA-1.5.5

        Article 61(d) prohibits an auditor from (i) being the chairman or a member of the Board of Directors of the company he/she audits; (ii) holding any managerial position in the company he/she audits; and (iii) acquiring any shares in the company he/she audits, or selling any such shares he/she may already own, during the period of his audit. Furthermore, the auditor must not be a relative (up to the second degree) of a person assuming management or accounting duties in the company.

        Adopted: January 2007

      • AA-1.5.6

        The restriction in Paragraph AA-1.5.3 applies to overseas insurance licensees as well as Bahraini insurance licensees.

        Amended: January 2007

      • AA-1.5.7

        A partner, Director or manager on the engagement team of auditing an insurance licensee may not serve on the Board or in a controlled function of the licensee, for two years following the end of their involvement in the audit, without prior authorisation of the CBB.

        Amended: January 2007

      • AA-1.5.8

        Chapter AU-1.2 sets out the CBB's 'controlled functions' requirements.

        Amended: January 2007

    • Definition of 'Auditor'

      • AA-1.5.9

        For the purposes of Section AA-1.5, 'auditor' means the partners, Directors and managers on the engagement team responsible for the audit of the insurance licensee.

        Amended: January 2007