THE CENTRAL BANK has rationalized the framework for the selection of external auditors of Bangko Sentral ng Pilipinas (BSP) Supervised Financial Institutions (BSFIs) to streamline and centralize requirements across agencies.

The BSP said in a statement on Wednesday that its policy-setting Monetary Board has approved revised guidelines “governing the selection, appointment and delisting of external auditors” of BSFIs.

“The new guidelines aim to streamline the selection process for external auditors across the financial sector and promote ease of doing business,” the central bank said.

The new guidelines introduce the adoption of a centralized system for the accreditation and selection of external auditors, streamlining the multiple accreditation requirements of the BSP, the Securities and Exchange Commission (SEC) and the Insurance Commission (IC).

Under the new framework, the BSP said starting next month, all applications — new or renewal — for inclusion in the List of Selected External Auditors for BSFIs shall be submitted to the SEC. The applications will be evaluated by the SEC in coordination with the BSP and shall be subject to the requirements the agencies agreed upon.

The central bank said inclusion in the external auditors list will be valid for five years or for a shorter period, depending on the agencies.

Previously, the selection of external auditors included in the BSP list was valid for three years. Auditors had to apply for accreditation and selection directly with the central bank following the requirements set under BSP Circular No. 410 dated Oct. 29, 2003.

As agencies transition to this new framework, the central bank said auditors whose inclusion in the BSP’s List of Selected External Auditors is valid only for the 2018 financial statements are given a one-year extension to allow them to audit of the 2019 financial statements of BSFIs.

The centralized system is a project of the Financial Sector Forum (FSF) composed of the BSP, SEC, IC and the Philippine Deposit Insurance Corporation.

“The FSF member agencies recognize the critical role of external auditors in promoting good governance and transparency in financial reporting,” the BSP said in the statement.

“It is in this light that the FSF has been embarking on initiatives aimed at promoting adherence to quality standards in external audit,” it said. — R.J.N. Ignacio