Announcement of competitive selection of an independent auditor for conducting audit procedures

JSC CB «PRIVATBANK», CYPRUS BRANCH PROFILE

JSC CB "PRIVATBANK", Cyprus branch (hereinafter - the Branch) invites audit firms to participate in the competition for the selection of an independent auditor to conduct statutory audit of annual financial statements for the year 2022 (hereinafter - the Competition).

Object of audit

To obtain reasonable assurance about whether the Branch’s financial statements as a whole are free from material misstatement, whether due to fraud or error, and to express an opinion to the members of the Bank on whether the financial statements give a true and fair view of the financial position, financial performance and cash flows accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and the requirements of the Cyprus Companies Law, Cap. 113 and any additional requirements set out in directives issued pursuant to the Law, in accordance with subsection (3) of section 27H of the Business of Credit Institutions Laws of 66(I)/1997, as subsequently amended. Including undertaking their obligations arising from section 28 of the Law which relates to the communication between the Central Bank of Cyprus and the approved auditors.

Scope of audit

  1. Audit should cover the examination of all aspects of the Branch relevant to financial statements.
    • (a) perform necessary tests, enquiries and other verification procedures of accounting transactions and account balances. In particular: process policies and accounting review, loan file review and impairment verification on selected samples,deposit file review, verification of adequacy of provisioning levels, verification of salary expenses, administrative expenses etc.
    • (b) considering the judgments used by management in preparing the financial statements.
    • (c) the audit of financial statements including the auditor’s responsibility for the going concern assessment and review of the management report.
    • (d) perform necessary enquiries and examination of existing AML / CTF procedures of the Branch.
    • (e) exercise professional judgment and maintain professional skepticism throughout the audit,
    • (f) design and implement audit procedures responsive to the risks of material misstatement of the financial statements, whether due to fraud or error. and also identify and assess, and obtain audit evidence that procedure is sufficient and appropriate to provide a basis for auditors opinion,
    • (g) prepare and submit the audit report to the members, and also to submit Additional Report to the Board of the Bank no later than the date of the submission of the audit report to the members, on certain specific requirements regarding the statutory audit of public interest entities
  2. Special Report to Supervisor. This relates to the CBC requirements for assurance on the compliance with the banking business license.
  3. The audit shall be conducted in accordance with International Standards on Auditing (“ISAs”) as promulgated by the International Auditing and Assurance Standards Board (the “IAASB”).
  4. 4.Applicable financial reporting framework is “IFRS as adopted for use in the EU” and the auditing framework relevant for EU and Cyprus requirements.
  5. The proposed audit firm accept required to report directly to the CBC the following:
    • (a) any instances where the operations of the Cyprus Branch have not, in their opinion, been in compliance with the conditions attached to the Cyprus Branch’s banking business licence granted by the Central Bank of Cyprus and the amendments thereon;
    • (b) whether the internal control system of the Cyprus Branch is, in their opinion, adequate;
    • (c) whether the information which passes from the Cyprus Branch to its Head Office in Ukraine is, in their opinion, both adequate and accurate; and
    • (d) whether the Branch’s provisions for bad and doubtful debts are adequate and not substantially understated.

 

Selection criteria

The auditors must have the qualifications and experience necessary for the effective and unbiased audit of the Branch.

To participate in the competition, the independent auditor must correspond to the following criteria:

  • - inclusion of the auditing entity in the section of the Register of auditors and auditing entities, which gives the right to conduct a mandatory audit of the financial statements of public interest entities;
  • - absence of the audited entity included, its head and / or auditors of any penalties applied during the last three years by the body that regulates / regulated the audit activity;
  • - the auditor does not have an existing and / or potential conflict of interest and threats to independence in the provision of audit services and any conflict of interest whatsoever arising from any business or personal relationships between the current and former owners, managers and employees of the proposed audit firm and the owners, managers and employees of Joint Stock Company Commercial Bank “Privatbank” and/or the current and former managers and employees of the Branch;
  • - the auditing entity has at least five years of experience in conducting a mandatory annual audit of the financial statements of banks in Cyprus, the list of which is determined by the Central Bank of Cyprus;
  • - no special economic and other restrictive measures have been enforced to the auditing entity, owners of its significant participation or related persons during the last 12 months by Cyprus and / or the European Union;
  • - provide a name list of the person/persons proposed to be responsible for the audit of the Branch:
  • (a) іnclude information about the qualifications as well as the previous relevant work experience of each of the aforesaid persons in the audit profession;
  • (b) іstate explicitly the experience in auditing banks and/or financial services companies of the each of the aforesaid persons, providing information as to which banks and/or financial services companies they have been auditing and for how long;

- from individuals (auditors) that they

  1. are NOT presented in the public registers of auditors and/or are not members of professional organizations of auditors and/or accountants of the country that carries out armed aggression against Ukraine
  2. DO NOT carry out any audit activities as part of audit firms registered in the country that carries out armed aggression against Ukraine, and/or whose founders (participants, shareholders) and/or ultimate beneficial owners (controllers) are citizens of a country that carries out armed aggression against Ukraine, and/ or business entities registered on the territory of a country that carries out armed aggression against Ukraine, and/or that directly or indirectly own shares in the authorized capital and/or the right to vote in such audit firms, regardless of formal ownership or participation in their management bodies
  3. DID NOT provide services to Joint Stock Company Commercial Bank “Privatbank” and/or the Branch and/or to any borrowers of Joint Stock Company Commercial Bank “Privatbank” and/or the Branch before 21.12.2016

and from legal entities (audit companies):

  1. DO NOT have as founders (participants, shareholders) any citizens of a country that carries out armed aggression against Ukraine, and/or subjects of audit activity whose ultimate beneficial owners (controllers) are citizens of a country that carries out armed aggression against Ukraine, and/or business entities registered on the territory of the country that is carrying out armed aggression against Ukraine, and/or persons who are members of public registers of auditors and/or members of professional organizations of auditors and/or accountants of the country that is carrying out armed aggression against Ukraine, and /or in which the country, which carries out armed aggression against Ukraine, directly or indirectly owns a share in the authorized capital
  2. are NOT members of an audit network registered in country that carries out armed aggression against Ukraine, unless such an audit network has notified in writing the Body of Public Supervision of Auditing Activity about the initiation of the process of termination their membership of the relevant audit network by an audit firm registered on the territory of the country , which carries out armed aggression against Ukraine, and did not complete this process until December 31, 2022
  3. DID NOT provide services to Joint Stock Company Commercial Bank “Privatbank” and/or the Branch and/or to any borrowers of Joint Stock Company Commercial Bank “Privatbank” and/or the Branch before 21.12.2016

The customer can make a decision to refuse (disqualify) a participant from participating in the procurement procedure, preliminary qualification of participants, and can reject a bidding offer (qualification, price offer), if: the presence of the origin of goods, works, services, involved consultants, partners and subcontractors is established from countries classified by the Bank on the basis of internal bank documents in the field of financial monitoring as countries of unacceptably high risk (including from the Russian Federation/Republic of Belarus - as aggressor countries).

 

Information and documents submitted by the participant:

  • - Company Registration Certificate
  • - Business license
  • - Certificate of business address
  • - Certificate of Directors
  • - Statutory documents
  • - Financial statements for 2 previous years (or last available)
  • - Declaration of independence and absence of conflict of interests
  • - Declaration of absence of failures to apply special economic and other restrictive measures to the auditing entity, owners of its significant participation or related persons during the last 12 months by Cyprus and / or the European Union
  • - Confirmation of at least five years experience in conducting a mandatory annual audit of the financial statements of banks
  • - a short summary of the composition of the team, taking into account the selection criteria which carries out armed aggression against Ukraine
  • - Fill out the Questionnaire (Annex)
  • - Schematically depict the ownership structure of the company
  • - Provide documents that confirm the ownership of the independent auditor: a copy of a legalized extract from a commercial, banking or court register or a notarized registration certificate of an authorized body of a foreign state (not Ukraine), which determines the owners/shareholders/founders. If the documents are drawn up in a language that differs from Ukrainian, English - provide a translation of the document into one of the languages.
  • - If there are other companies in the ownership structure, then provide documents for them that confirm the connection between the companies and documents that confirm the ownership: a copy of a legalized extract from the trade, banking or court register or a notarized registration certificate of an authorized body of a foreign state, which determine the owners/shareholders/founders. If the documents are drawn up in a language that differs from Ukrainian, English - provide a translation of the document into one of the languages.
  • - Indicate the ultimate beneficial owner of the company. If there is no CBS, then indicate for what reason, if the shares are placed on the stock exchange, write on which one.

All documents are submitted in English under the signature of the authorized person of the audited entity. Additionally, the commercial proposal letter is submitted in Ukrainian. Copies of documents submitted as part of the competitive documentation must be certified by the signature of the authorized person and the seal (if available).

Competition schedule:

Submission of competitive documentation by March 23, 2023
The deadline for the competition is March 28, 2023.

 

Competitive documentation are submitted by Contestants:

 

Contact person:

Viktoriya Zyabrykova, phone: 22-750-378, mob. 99-306-601
e-mail: viktorija.zjabrikova@privatbank.com.cy

 

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