Circular of the China Banking Regulatory Commission on Issuing the Guidelines for the Internal Audit of Commercial Banks
Circular of the China Banking Regulatory Commission on Issuing the Guidelines for the Internal Audit of Commercial Banks
Circular of the China Banking Regulatory Commission on Issuing the Guidelines for the Internal Audit of Commercial Banks
Yin Jian Fa [2016] No.12
April 16, 2016
All banking regulatory bureaus, policy banks, large banks and joint-stock banks, postal saving banks, foreign banks, financial assets management companies and other financial institutions acting in concert:
The Guidelines for the Internal Audit of Commercial Banks are hereby released to you for your compliance.
Guidelines for the Internal Audit of Commercial Banks
Chapter I General Provisions
Article 1 To urge commercial banks to perfect their internal governance, strengthen their internal control and risks management, perfect the system for internal audit and improve their independence and effectiveness thereof, the Guidelines for the Internal Audit of Commercial Banks (the "Guidelines") are hereby formulated in accordance with the Banking Regulation Law of the People's Republic of China, Law of the People's Republic of China on Commercial Banks, and other laws and regulations.
Article 2 The Guidelines apply to all commercial banks legally set-up within the territory of the People's Republic of China.
Article 3 For the purpose of the Guidelines, internal audit means supervision, evaluation and consulting activities independently and objectively carried out within the commercial banks, under which, systematic and standardized methods are applied to review, evaluate and urge for the improvement of their performance in terms of operations, risks management, internal control, compliance and corporate governance, so as to promote their stable operations and value enhancement.
Article 4 The purpose of conducting internal audit by a commercial bank includes to promote the effective implementation of the state's laws and regulations as well as regulatory rules on economy and finance, urge commercial banks to establish an effective framework for risk management, internal control, compliance and corporate governance and constantly improve the same and cause the related audit objects to effectively perform their duties so as to realize the strategic objectives of the bank.
Article 5 A commercial bank shall keep internal audit separate from its business operations, risk management, internal control and compliance, and evaluate the effectiveness of the performance of the above functions and powers. The internal audit activity shall be conducted on the principles of objectivity and independence, and the professional competence and professional integrity of the internal audit staff need to be constantly improved.
Article 6 Banking supervisory authorities will supervise and assess the implementation of internal audit conducted by commercial banks under the Guidelines.
Chapter II Organizational Structure
Article 7 A commercial bank shall establish an independent and vertical internal audit system.
Article 8 The board of directors of a commercial bank will be ultimately responsible for the independence and effectiveness of its internal audit. The board of directors shall, based on the business size and complexity of the bank, equip it with adequate and stable internal audit staff; provide adequate funds and include them in the financial budget; be responsible for the approval of the articles of association for internal audit, medium and long-term audit plan and annual audit plan etc; offer necessary guarantee for independent and objective internal audit; and assess the independence and effectiveness of internal audit, and evaluate the internal audit quality.
Article 9 The board of directors shall have an audit committee, which will consist of not less than three members, and the majority shall be independent directors. Members of an audit committee shall have professional knowledge and working experience in finance, auditing, accounting and other fields. In principle, the head of the audit committee shall be an independent director.
The audit committee shall be responsible to the board of directors and be responsible for the approval of the articles of association for internal audit and other key systems and reports, and medium and long-term audit plan and annual audit plan, and for the guidance on and the assessment and evaluation of internal audit as authorized by the board of directors.
Article 10 The board of supervisors shall supervise the internal audit work of the bank, and be entitled to require the board of directors and the senior management to provide relevant information on the audit.
Article 11 Senior management shall support the internal audit department to perform its duties independently, ensure available internal audit resources, timely report to the audit committee latest development and changes of business development, product innovation, operation process, risk management, internal control and compliance, and based on the problems found in internal audit and audit recommendations, promptly take effective corrective measures.
Article 12 A commercial bank can have a chief auditor or chief audit officer (hereinafter collectively referred to as the "chief auditor"), who will be appointed and dismissed by the board of directors.
......
Yin Jian Fa [2016] No.12
April 16, 2016
All banking regulatory bureaus, policy banks, large banks and joint-stock banks, postal saving banks, foreign banks, financial assets management companies and other financial institutions acting in concert:
The Guidelines for the Internal Audit of Commercial Banks are hereby released to you for your compliance.
Guidelines for the Internal Audit of Commercial Banks
Chapter I General Provisions
Article 1 To urge commercial banks to perfect their internal governance, strengthen their internal control and risks management, perfect the system for internal audit and improve their independence and effectiveness thereof, the Guidelines for the Internal Audit of Commercial Banks (the "Guidelines") are hereby formulated in accordance with the Banking Regulation Law of the People's Republic of China, Law of the People's Republic of China on Commercial Banks, and other laws and regulations.
Article 2 The Guidelines apply to all commercial banks legally set-up within the territory of the People's Republic of China.
Article 3 For the purpose of the Guidelines, internal audit means supervision, evaluation and consulting activities independently and objectively carried out within the commercial banks, under which, systematic and standardized methods are applied to review, evaluate and urge for the improvement of their performance in terms of operations, risks management, internal control, compliance and corporate governance, so as to promote their stable operations and value enhancement.
Article 4 The purpose of conducting internal audit by a commercial bank includes to promote the effective implementation of the state's laws and regulations as well as regulatory rules on economy and finance, urge commercial banks to establish an effective framework for risk management, internal control, compliance and corporate governance and constantly improve the same and cause the related audit objects to effectively perform their duties so as to realize the strategic objectives of the bank.
Article 5 A commercial bank shall keep internal audit separate from its business operations, risk management, internal control and compliance, and evaluate the effectiveness of the performance of the above functions and powers. The internal audit activity shall be conducted on the principles of objectivity and independence, and the professional competence and professional integrity of the internal audit staff need to be constantly improved.
Article 6 Banking supervisory authorities will supervise and assess the implementation of internal audit conducted by commercial banks under the Guidelines.
Chapter II Organizational Structure
Article 7 A commercial bank shall establish an independent and vertical internal audit system.
Article 8 The board of directors of a commercial bank will be ultimately responsible for the independence and effectiveness of its internal audit. The board of directors shall, based on the business size and complexity of the bank, equip it with adequate and stable internal audit staff; provide adequate funds and include them in the financial budget; be responsible for the approval of the articles of association for internal audit, medium and long-term audit plan and annual audit plan etc; offer necessary guarantee for independent and objective internal audit; and assess the independence and effectiveness of internal audit, and evaluate the internal audit quality.
Article 9 The board of directors shall have an audit committee, which will consist of not less than three members, and the majority shall be independent directors. Members of an audit committee shall have professional knowledge and working experience in finance, auditing, accounting and other fields. In principle, the head of the audit committee shall be an independent director.
The audit committee shall be responsible to the board of directors and be responsible for the approval of the articles of association for internal audit and other key systems and reports, and medium and long-term audit plan and annual audit plan, and for the guidance on and the assessment and evaluation of internal audit as authorized by the board of directors.
Article 10 The board of supervisors shall supervise the internal audit work of the bank, and be entitled to require the board of directors and the senior management to provide relevant information on the audit.
Article 11 Senior management shall support the internal audit department to perform its duties independently, ensure available internal audit resources, timely report to the audit committee latest development and changes of business development, product innovation, operation process, risk management, internal control and compliance, and based on the problems found in internal audit and audit recommendations, promptly take effective corrective measures.
Article 12 A commercial bank can have a chief auditor or chief audit officer (hereinafter collectively referred to as the "chief auditor"), who will be appointed and dismissed by the board of directors.
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