Islamic Banking Act · s 99

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99.
Auditing
(1) Notwithstanding the provisions of the Companies Act
(Chapter 39), every Islamic bank shall appoint annually an auditor who shall be a person approved by the Authority and not disqualified under subsection (2) from holding such an appointment; and for the purposes of this section an “approved auditor” is an auditor eligible for appointment as an auditor under the Companies Act (Chapter 39).
(2) No person shall be qualified to be appointed an auditor of an
Islamic bank or to continue to hold such an appointment if —
(a) he is not or ceases to be an approved auditor;
(b) he is or becomes a director, controller, officer or agent of the
Islamic bank; or
(c) he has or acquires a financial or proprietary interest in the
Islamic bank otherwise than as a depositor.
(3) The Authority may appoint an auditor for an Islamic bank —
(a) if the Islamic bank fails to appoint an auditor;
(b) if the Authority considers it desirable that another auditor should act with the auditor appointed under subsection (1);
(c) if the Authority considers it desirable to replace the auditor appointed under subsection (1), and may at any time, fix the remuneration to be paid by the Islamic bank to the auditor.
(4) The duties of an auditor appointed under subsection (1) or (3)
shall be —
(a) to carry out, for the year in respect of which he is appointed, an audit of the accounts of the Islamic bank;

Islamic Banking
(b) to make a report in accordance with the provisions of the
Companies Act (Chapter 39) —
(i) in the case of an Islamic bank incorporated in
Brunei Darussalam, upon the annual balance sheet and profit and loss account that are referred to in section 27; and
(ii) in the case of an Islamic bank incorporated outside
Brunei Darussalam, upon the annual balance sheet and profit and loss account showing the assets and liabilities and profit or loss arising out of the
Islamic bank’s operations in Brunei Darussalam; and
(c) to make a report on such other matters as may be specified by the Authority.
(5) The Authority may impose all or any of the following duties on an auditor in addition to those provided under subsection (4) —
(a) a duty to submit such additional information in relation to his audit as the Authority considers necessary;
(b) a duty to enlarge or extend the scope of his audit of the business and affairs of the Islamic bank;
(c) a duty to carry out any other examination or establish any procedure in any particular case; and
(d) a duty to submit a report on any of the matters referred to in paragraphs (b) and (c), and the Islamic bank shall remunerate the auditor in respect of the discharge by him of all or any of these additional duties.
(6) The auditor’s report made under subsection (4) shall be attached to the balance sheet, income and expense statement, and the profit and loss account and a copy thereof together with any report submitted under subsection (5) shall be transmitted in writing to the Authority.
(7) An auditor of an Islamic bank shall notify the Authority of any information which relates to the business or affairs of the Islamic bank and of which he becomes aware in his capacity as auditor of the Islamic bank or of a

Islamic Banking 94
body with which it is closely linked by control or in preparing any report under this Act in the following circumstances —
(a) the information is such as to give the auditor reasonable cause to believe, as regards the Islamic bank concerned —
(i) that there is or has been or may have been a failure to fulfil any of the criteria specified in section 8 and that the failure is likely to be of material significance;
(ii) that its licence should be revoked under section 21;
(iii) that there is or has been, or may be or may have been, a contravention of any provision of this Act and that the contravention is likely to be of material significance; or
(iv) that the continuous functioning of the bank may be affected;
(b) in a case where the auditor is the auditor of the Islamic bank concerned, the information is such as to lead to the auditor’s refusal to certify the accounts or to the expression of reservation.
(8) In subsection (7)(a)(iii), “of material significance” means of material significance for the exercise of the functions of the Authority under this Act.
(9) No duty to which an auditor of an Islamic bank may be subject shall be regarded as contravened by reason of his communicating in good faith to the Authority, whether or not in response to a request made by the
Authority, any information of which he becomes aware or opinion that he may form in his capacity as auditor and which —
(a) relates to the business or affairs of the Islamic bank or of a body with which the Islamic bank is linked by control; and
(b) is relevant to any function of the Authority under this Act or any other written law.

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s 99Auditing

(1)

Notwithstanding the provisions of the Companies Act

(Chapter 39), every Islamic bank shall appoint annually an auditor who shall be a person approved by the Authority and not disqualified under subsection (2) from holding such an appointment; and for the purposes of this section an “approved auditor” is an auditor eligible for appointment as an auditor under the Companies Act (Chapter 39).

(2)

No person shall be qualified to be appointed an auditor of an

Islamic bank or to continue to hold such an appointment if —

(a)

he is not or ceases to be an approved auditor;

(b)

he is or becomes a director, controller, officer or agent of the

Islamic bank; or

(c)

he has or acquires a financial or proprietary interest in the

Islamic bank otherwise than as a depositor.

(3)

The Authority may appoint an auditor for an Islamic bank —

(a)

if the Islamic bank fails to appoint an auditor;

(b)

if the Authority considers it desirable that another auditor should act with the auditor appointed under subsection (1);

(c)

if the Authority considers it desirable to replace the auditor appointed under subsection (1), and may at any time, fix the remuneration to be paid by the Islamic bank to the auditor.

(4)

The duties of an auditor appointed under subsection (1) or (3)

shall be —

(a)

to carry out, for the year in respect of which he is appointed, an audit of the accounts of the Islamic bank;

Islamic Banking

(b)

to make a report in accordance with the provisions of the

Companies Act (Chapter 39) —

(i)

in the case of an Islamic bank incorporated in

Brunei Darussalam, upon the annual balance sheet and profit and loss account that are referred to in section 27; and

(ii)

in the case of an Islamic bank incorporated outside

Brunei Darussalam, upon the annual balance sheet and profit and loss account showing the assets and liabilities and profit or loss arising out of the

Islamic bank’s operations in Brunei Darussalam; and

(c)

to make a report on such other matters as may be specified by the Authority.

(5)

The Authority may impose all or any of the following duties on an auditor in addition to those provided under subsection (4) —

(a)

a duty to submit such additional information in relation to his audit as the Authority considers necessary;

(b)

a duty to enlarge or extend the scope of his audit of the business and affairs of the Islamic bank;

(c)

a duty to carry out any other examination or establish any procedure in any particular case; and

(d)

a duty to submit a report on any of the matters referred to in paragraphs (b) and (c), and the Islamic bank shall remunerate the auditor in respect of the discharge by him of all or any of these additional duties.

(6)

The auditor’s report made under subsection (4) shall be attached to the balance sheet, income and expense statement, and the profit and loss account and a copy thereof together with any report submitted under subsection (5) shall be transmitted in writing to the Authority.

(7)

An auditor of an Islamic bank shall notify the Authority of any information which relates to the business or affairs of the Islamic bank and of which he becomes aware in his capacity as auditor of the Islamic bank or of a

Islamic Banking 94

body with which it is closely linked by control or in preparing any report under this Act in the following circumstances —

(a)

the information is such as to give the auditor reasonable cause to believe, as regards the Islamic bank concerned —

(i)

that there is or has been or may have been a failure to fulfil any of the criteria specified in section 8 and that the failure is likely to be of material significance;

(ii)

that its licence should be revoked under section 21;

(iii)

that there is or has been, or may be or may have been, a contravention of any provision of this Act and that the contravention is likely to be of material significance; or

(iv)

that the continuous functioning of the bank may be affected;

(b)

in a case where the auditor is the auditor of the Islamic bank concerned, the information is such as to lead to the auditor’s refusal to certify the accounts or to the expression of reservation.

(8)

In subsection (7)(a)(iii), “of material significance” means of material significance for the exercise of the functions of the Authority under this Act.

(9)

No duty to which an auditor of an Islamic bank may be subject shall be regarded as contravened by reason of his communicating in good faith to the Authority, whether or not in response to a request made by the

Authority, any information of which he becomes aware or opinion that he may form in his capacity as auditor and which —

(a)

relates to the business or affairs of the Islamic bank or of a body with which the Islamic bank is linked by control; and

(b)

is relevant to any function of the Authority under this Act or any other written law.