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Exemption of Government-Owned or -Controlled Financial Institutions from Audit by External Independe

01.28.2005

The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP), approved today the exemption of government-owned or –controlled banks, specifically, the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) including their subsidiaries and affiliates as well as other financial institutions under BSP supervision which are under the concurrent jurisdiction of the Commission on Audit (COA) from the  requirement of annual financial audit by an acceptable external auditor.  

The Monetary Board decided that said financial institutions’ full public accountability and compliance with banking laws and regulations can be reasonably assured with the concurrent audit and examination being conducted by the COA and BSP which are both presently applying the risk-based approach to audit and examination.  Previous COA rulings have consistently opposed the hiring of external independent auditors by the DBP and LBP on the ground that it is unnecessary expenditure of precious government funds.  The COA noted that billings of external auditors amount to several million pesos.

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