The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP) decided to further raise the bar on corporate governance practices of banks by approving the issuance of new regulations on the internal audit function.
The new rules define the status and scope of the internal audit function, prescribe minimum qualification for the internal auditor, require the adoption of the Code of Ethics and international internal auditing standards and provide a mechanism for reporting financial improprieties and exposing malpractices/misconduct or the so-called corporate whistle-blowing provision.
The internal audit function must be independent, objective and free to report audit results, findings, appraisals and opinions to the appropriate level of management. At the same time, the Audit Committee or senior management has been tasked with the responsibility of providing adequate material resources and staffing that would enable internal audit to attain its objectives. It shall likewise establish arrangements whereby officers and staff may, in confidence, raise concerns about possible malpractices or wrongdoings in matters of financial reporting, internal control, risk management and other issues to persons or entities that have the power to take corrective action.
The internal auditor of a universal bank or a commercial bank must be a Certified Public Accountant (CPA) and must have at least five (5) years experience in the regular audit of a universal or commercial bank as auditor-in-charge, senior auditor or audit manager. He must possess the knowledge, skills, and other competencies to examine all areas in which the institution operates.
On the other hand, the internal auditor of a thrift bank, quasi-bank, trust entity or national cooperative bank must be a CPA with at least five (5) years experience in the regular audit of a thrift bank, quasi-bank, trust entity or national cooperative bank as auditor-in-charge, senior auditor or audit manager or, in lieu thereof, at least three (3) years experience in the regular audit of a universal bank or commercial bank as auditor-in-charge, senior auditor or audit manager.