Regulation 7 Conditions of audit agreement referred to in regulation 6(3)
Paragraph (2) specifies the audit, and paragraph (3) the terms and conditions, referred to in regulation 6(3).
The audit specified by this paragraph is an audit consisting of—
a review by the auditor of the procedures put in place by the deposit-taker for the purpose of enabling him to comply with his obligations under section 482(5) of the Act in relation to deposits of the kind referred to in regulation 5(a), and
a check by the auditor of a sample of such deposits in order to determine whether the procedures referred to in paragraph (i) have been observed in practice;
a check by the auditor of a sample of deposits of the kind referred to in regulation 5(a) in order to determine whether—
the deposit-taker is in possession of valid declarations and, where required, certificates in support of those declarations, and
there is information in the deposit-taker’s possession which can reasonably be taken to indicate that one or more of such deposits is or may be a relevant deposit.
The terms and conditions specified by this paragraph are that—
The Board are satisfied that the auditor is experienced in carrying out audits of a deposit-taker’s business;
the auditor is instructed at the deposit-taker’s expense;
the Board, the deposit-taker and the auditor reach agreement in relation to—
the aspects of the procedures followed by the deposit-taker which are to form the subject of the audit;
the scope of the information which is to be provided in the audit report made to the Board; and
the scope of the sample checks referred to in paragraph (2) (a) (ii)
and (b).
the deposit-taker makes available to the auditor all such books, documents, records and other information as the auditor may reasonably require for the purpose of carrying out the audit and making the audit report;
in carrying out the audit and making the audit report, the auditor has regard to the principles set out in the Special Reports booklet and, in particular, paragraphs 24 to 42 of that booklet;
the audit is carried out periodically, and the periods to be covered by the audit shall be—
as regards the first audit, the period commencing on such date as the Board and the deposit-taker may agree, being not earlier than 6th April 1991, and ending on a date determined by the Board;
as regards each subsequent audit, the period of one year following the end of the last audit period, or such longer period as the Board and the deposit-taker may agree;
each audit is carried out, and the audit report furnished to the Board, not later than 180 days after the end of the period covered by that audit;
at the same time as he furnishes the audit report to the Board, the auditor sends a copy of the report to the deposit-taker;
on receipt of the audit report, the Board may require the auditor or the deposit-taker to furnish them with such further information as they may reasonably require for the purpose of clarifying any part of the report.