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Bank Supervision | Audit of Financial Statements of Banks

Audit of Financial Statements of Banks

The conduct of audit of financial statements of banks is regulated in detail by:

The text below is a summary of the information contained in the above regulations.

The National Bank of Serbia determines and publishes a list of external auditors eligible to perform audit of financial statements of banks. In order to be included in the list, an external auditor must:

  • comply with the conditions prescribed for an audit firm by the law on accounting and auditing;
  • employ at least six certified auditors licensed to perform audit of financial statements, at least three of whom have a minimum three year track record in auditing financial statements of banks;
  • employ at least 20 people in its organisational unit in charge of audit;
  • ensure that the National Bank of Serbia had not removed such audit firm from the List based on Section 5, paragraph 4 of the Decision on External Bank Audit in the last five years.

In order to be included in the List, the audit firm shall submit to the National Bank of Serbia a written request together with supporting documentation to prove compliance with the above criteria. The National Bank of Serbia shall make a decision on the request within 30 days after receipt of the duly completed request. The National Bank of Serbia shall publish the List on its website.

A listed external auditor may not, in the course of the same year, engage in auditing of financial statements of a bank and provide it with consultancy services, nor conduct an audit of financial statements for the year during which such services were provided. A bank may not appoint an external auditor which generated more than a half of its total income in the previous year from auditing the accounts of that bank. The external auditor may conduct no more than five consecutive audits of regular annual financial statements of the bank.  Furthermore, the external auditor may not conduct an audit of financial statements of a bank for the year in which one of its employees was temporarily hired to work in, or by which he/she was temporarily hired at the time of conducting the audit. Should audit be performed by the external auditor which is not included in the list, and/or if the audit was conducted in breach of the provisions of the Law on Banks and other regulations, the National Bank of Serbia shall not accept the audit report.

The audit report includes:

  • external auditor’s report and opinion,
  • financial statements examined and appraised (balance sheet and income statement, cash flow statement, statement of changes in equity, statistical annex, and notes to financial statements),
  • letter on financial statement presentation, and
  • analyses and enclosures.

The bank shall submit to the National Bank of Serbia the audit report along with the management letter delivered by the external auditor upon the completion of audit, by no later than 120 days after the end of the business year to which the audit report relates.

No later than 15 days from the submission of audit report, the bank shall publish:

  • complete external auditor’s report, on its website and keep it on until the publication of the auditor’s report for the next business year, and
  • external auditor’s summary report in daily newspapers circulated in the territory of the Republic of Serbia.

If the National Bank of Serbia refuses to accept the external auditor’s report, the bank shall replace such report on its website with a report on a newly conducted audit prepared by another external auditor.

See More...
Documents Supporting the Application to Be Included in the List of External Auditors
List of External Auditors