External Auditors - Borimanga Rural Bank

The Borimanga Rural Bank Ltd in the Northern Region intends to engage an Audit Firm to provide external audit services in compliance with Section 81 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and Section 139 of the Companies Act, 2019 (Act 992). In line with its auditor rotation policy, the Bank is inviting suitably qualified audit firms to submit technical and financial proposals as follows; 

Objectives of the assignment

• To carry out annual comprehensive financial audits in line with International Standards of Auditing with a view to expressing an opinion on whether the financial statements prepared by the directors give a true and fair view of state of financial affairs of the Bank in accordance with International Financial Reporting Standards (IFRSs), the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and the Companies Code of Ghana, 1963 (Act 179);
• To review the effectiveness of the Bank’s Internal Controls, Risk Management Systems and Processes;  

Scope of Audit

• These terms of reference address audit requirement for the audit of financial statements of the Bank covering the period 1st January – 31st December of each year;  
• A draft audit report should be submitted by 5th March and a final signed audit report with certified statements by 20th March each year.
• Auditors may also be required to audit specific areas as and when requested by the Directors of the Bank.
• The audits should consider and cover Fraud and Errors: Consider the risks of material misstatements in the financial statements due to fraud as required by ISA 240: The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements.
• The audit report should state if the audit was not in conformity with any of the above standards and national laws, and regulations have been complied with, and that the financial and accounting procedures approved for the Bank (e.g. human resource manual, financial procedures manual, etc.) were followed and used.

The Audit Report and Management Letter

a) Audit Report:  The audit report should clearly indicate the auditor’s opinion. This would include at least the following: The title, addressees, and an opening or introductory paragraph containing identification of the financial information audited including the period covered; and Statement of the responsibility of the bank’s management and the responsibility of the auditor;

A scope and methodology paragraph describing the nature of the audit referencing the accounting standards that have been applied and indicate the effect of any deviations from those standards; The audit standards that were applied; and  The work the auditor performed; An opinion paragraph disclosing whether the financial statements and supporting schedules fairly present the underlying transactions in all material respects;

Whether the financial transactions reflected in the statements are in accord with financial regulations and procedures, budgetary provisions and other applicable directives; The auditor may expand the report to include other information and explanations as may be necessary for the engagement.

b) Management Letter: The auditor should submit a Management letter to the Directors at the completion of the audit. The topics/issues to be covered in the letter should include: 

• Give comments and observations on the accounting records, systems and controls that were examined during the course of the audit;
• Identify specific deficiencies or areas of weakness in systems and controls, and make recommendations for their improvement;
• Communicate matters that have come to their attention during the audit which might have a significant impact on the operations of the Bank.
• Give comments on the extent to which outstanding issues/qualifications issues have been addressed;
• Give comments on previous audits’ recommendations that have not been satisfactorily implemented;
• Bring to the Bank’s attention any other matters that the auditor considers pertinent, including ineligible expenditures;
• Recommendations to resolve/eliminate the internal control weaknesses noted should be included;
• Management comments/response to audit findings and recommendations. 

Required Skills or Experience

• The auditor must be completely impartial and independent from all aspects of management or financial interests in the Bank. The auditors should disclose any relationship that might possibly compromise their independence.  
• The auditor should be experienced in applying ISAs and IFRSs. The auditor must deploy adequate staff with appropriate professional qualifications and suitable experience with ISAs including experience in auditing the accounts of Rural Banks.  
• Curriculum vitae (CVs) of the audit partner and key staff should be attached to the proposal. CVs should include details on audits carried out by the applicable staff, including ongoing assignments indicating capability and capacity to undertake the audit and experience in auditing financial statements compliant with International Financial Reporting Standards.
• The Audit Firm should be registered, and have a practicing license from the Institute of Chartered Accountants, Ghana. The firm should have relevant experience in auditing Banks, particularly Rural Banks. The audit firm should have at least two full time partners, and have been in existence for not less than Five (5) years.

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