Banks and Deposit Companies (Reporting Accountants) (Facts and Matters of Material Significance) Regulations 2006

Summary

This regulation defines what counts as a fact or matter of material significance that a reporting accountant (an auditor or accountant acting under sections 39(2) or 46(4) of the Banks and Deposit Companies Act 1999) must notify to the Bermuda Monetary Authority. It does not create the notification duty itself but specifies the triggering circumstances for that existing statutory duty.

• Material misstatement: A material misstatement in the financial statements resulting from fraud, error or illegal acts, or their consequences.
• Going concern doubt: Substantial doubt about the institution's ability to continue as a going concern for one year from the balance sheet date.
• Prior misstatements or capital adequacy shortfall: Adjustments indicating prior year or current interim financial statements were materially misstated, or that the capital adequacy ratio would fall below the Authority's minimum.
• Internal control weakness: Identification of a material weakness in internal control, as defined in the regulation.
• Unresolved accounting disagreements: Unresolved disagreements with management on accounting principles that could reasonably lead to future material misstatements.
• Misleading the Authority: Evidence that a chief executive or other senior executive deliberately tried to mislead the Authority with false or misleading information.
• Fraud or integrity concerns: Evidence of fraud or attempted fraud by a chief executive or senior executive, or serious concerns damaging confidence in senior management's integrity.

Where a reporting accountant identifies any of these facts or matters in relation to a bank or deposit company, they are treated as matters of material significance for the Authority's functions under the Act, meaning they must be reported to the Authority.

Key obligations

• Reporting accountants (auditors or accountants under section 39(2) or 46(4)(d) of the Banks and Deposit Companies Act 1999) must notify the Authority upon identifying any of the specified facts or matters of material significance, including material misstatements, going concern doubts, capital adequacy shortfalls, internal control weaknesses, unresolved accounting disagreements, attempts to mislead the Authority, or evidence of fraud by senior executives.

Applies to

banks, deposit companies, reporting accountants (auditors and accountants)

Deadlines

• 15th day of July, 2006: Commencement date of the Regulations.

Related documents

• This document is made under Banks and Deposit Companies Act 1999