MALTA DEVELOPMENT BANK Independent External Audit Services

Transcription

1 MALTA DEVELOPMENT BANK Independent External Audit Services

2 1. INTRODUCTION 1.1. The Malta Development Bank ( the Bank ) was established on 24 November 2017 when the Malta Development Bank Act, 2017 came into force (Act No XXI of 2017, CAP 574). It commenced operations on 11 December 2017 when the Board of Directors was appointed and held its first meeting. The MDB is fully owned by the Government of Malta The role of the Bank is to complement commercial banks and other institutions so as to address market failures and to bridge any financial gaps in bankable investments. In particular, the aim of the Bank is to provide credit enhancement facilities to commercial banks, thereby encouraging such intermediaries to expand the size and range of loans to clients, especially for SMEs and infrastructural projects The Bank invites auditors with experience in external audit of banking sector clients to express their interest for the provision of audit services in relation to the annual financial statements of the Bank. 2. BASIS OF AUDIT 2.1. The audits will be conducted in accordance with International Standards on Auditing (ISA) as published by the International Auditing and Asssurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) and in accordance with the provisions of the Malta Development Bank Act The external audit should comply with applicable standards on quality control The external auditor should be objective and independent in both fact and appearance with respect to the Bank, in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code) and the ethical requirements of the Accountancy Profession Directive (Code of Ethics for Warrant Holders) issued in terms of the Accountancy Profession Act (CAP. 281) The appointed external auditor will not carry out other services that conflict with its external audit.

3 3. SCOPE 3.1. The audits should include the following: a. The presentation of the annual report and financial statements of the Bank in accordance with International Financial Reporting Standards as adopted by the European Union, including such reports as are required by stakeholders to obtain a clear indication of the state of the Bank s affairs as at the date of the balance sheet and the statement of comprehensive income for the financial period covered by the audit. b. An appropriate analysis to identify the risks of material misstatement in the Bank s financial statements and to properly meet any additional requirements. c. A critical review of the Bank s accounting systems, procedures and internal controls and a detailed report on their effectiveness. The assignment of a partner and/or a qualified director who will take responsibility for the management, conduct and timely completion of the audits. d. Ensure that the accounting records have been prepared in accordance with generally accepted accounting principles and established policies and practices and relevant legislation and guidelines, and give a true and fair view of the financial position of the Bank as at the financial year-end and of the performance for the fiscal year then ending. e. The appointed auditors will be expected to issue an audit opinion on the Bank s financial statements. f. In presenting the audit opinion and other relevant conclusions, the appointed auditor will be expected to consider and also report on all such aspects as are required by any statutory provisions. The Auditor will also be expected to conduct appropriate tests and enquiries in respect of the day-to-day operation of the business and proper evaluation of the Bank s assets and liabilities. g. The submission of a detailed management letter to the Board of Directors at the time of presentation of the financial statements in respect of the period reviewed in which the Auditor will be expected to: i. Give comments and observations on the accounting records, systems, and controls that were examined during the course of the audit;

4 ii. Identify specific deficiencies and areas of weakness in systems and controls and make recommendations for their improvement; iii. Communicate matters that have come to their attention during the audit which might have a significant impact on the operations of the Bank; and iv. Include management s comments in the final management letter. h. An annual communication to the Audit Committee confirming the firm s independence. i. At the request of the Board of Directors or the Supervisory Board of the Bank, the auditor shall carry out special ad hoc investigations or risk assessments in accordance with paragraph 38(3)(b) of the Malta Development Act. 4. ENGAGEMENT AND TIME SCHEDULE 4.1. Once the Bank notifies the auditor of the acceptance of the audit services, the Auditor is expected to give an Engagement Letter immediately before commencement indicating the details of the services being provided. The provisions outlined herewith are to form an integral part of the Engagement Letter The financial year of the Malta Development Bank is the calendar year The appointment shall be for a period of three (3) years, commencing with the audit of the financial period covering 11 December 2017 up to 31 December 2018 and subsequently the two periods covering the years ending 31 December 2019 and 31 December The appointment may be renewed annually thereafter subject to an overall period not exceeding five (5) years. The reappointment shall be at the sole discretion of the Board of Directors The appointed auditor will be required to provide the draft audited financial statements together with the auditor s report and management letter to the Board of Directors within six weeks of the end of the financial year The appointed auditor will be expected to maintain a reliable line of communication with the Bank.

5 5. EXPRESSION OF INTEREST 5.1. The expression of interest documentation to be submitted by auditors is to include: a. A corporate profile of the firm/auditor, including: i. Services offered; ii. Experience in the area iii. Credentials for undertaking the exercise; iv. List of public sector external audit clients v. List of financial institutions external audit clients; vi. Outline organigram; vii. Number of persons employed b. A complete and comprehensive proposal detailing the methodology that will be used for this assignment, indicating projected hours and number of personnel that will be allocated to the assignments. c. Brief profiles of the senior personnel that will work on these audits including qualifications and professional experience of each individual. d. A financial proposal in Euro (inclusive of VAT and all other applicable taxes) to cover all the requirements of this assignment shall be submitted, including the average billable hours per assignment and the charge out rates per grade of auditors working on the assignment. e. Submissions are to be made strictly in accordance with this document. Any additional material, brochures or promotional material may be submitted together with the information requested therein. f. All information requested in this document must be provided. If any section is not deemed to be applicable the interested party shall indicate it accordingly, without prejudice to the right of the Bank to disqualify any persons that do not provide the required information. g. The proposal submitted is to be signed by the authorised signatory of the respective firm.

6 6. DEADLINE FOR SUBMISSION OF EXPRESSION OF INTEREST 6.1. The proposal must be drawn up in English and submitted by not later than four (4) weeks after the date of this document. The Bank may invite auditors to supplement or clarify the documents they submit Auditors are to submit two (2) copies of their proposal which will be sealed in an envelope and mailed to Malta Development Bank, Pope Pius V Street, Valletta VLT SELECTION CRITERIA 7.1 Selection will be made in terms of the following evaluation criteria: a. List of banking sector external audit clients 20% b. Overall proposal presentation addressing MDB s requirements including audit approach, methodology, expertise, time allocation and reputation. 55% c. Overall cost of audit assignments 25% 8. TERMINATION 8.1. Without prejudice to the above, the Bank reserves the right to terminate the assignment without compensation in the event that there is an unjustified delay in the timings provided in the audit plan of more than ten (10) working days or if the successful firm demonstrates a lack of ability to perform these tasks. 9. PAYMENT 9.1. Payment will be effected within thirty (30) days from the issue of an invoice following the presentation of the final report to the Audit Committee of the Bank.

7 10. ADDITIONAL INFORMATION 10.1 The Bank reserves the right to reject any or all proposals, even the most advantageous The Bank undertakes to deal with the information provided in strict confidence. Document Date: 17 December 2018