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KUWAIT CITY, May 14: The Central Bank of Kuwait (CBK) has sent a cautionary note to some auditors, stressing that they should adhere to the specific quality of supervision when preparing financial reports supporting banks, particularly the examination of personal loan portfolios, reports Al-Rai daily quoting sources.
The sources pointed out that the message of the Central Bank, which was described as ‘strongly worded,’ came during an expanded meeting recently held with the auditors. The regulatory body reported that some auditors have submitted audit work to some banks in a manner inconsistent with the regulatory directives in this regard.
The Central Bank recently noted that some of the external audit work on the supporting financial reports is not provided by the auditors with the required accuracy, pointing out that some of the violations relate to material information discovered by its inspection teams regarding irregularities in personal loan portfolios and their benefits.
However, the auditors say that everything the bank had was intact. In accordance with the Central Bank’s instructions, banks are required to appoint an external auditor to prepare supporting financial reports, which include examining personal loan portfolios (consumer and credit), preparing donations reports to the Department of Money Laundering and Combating Terrorism, preparing capital adequacy reports, and other supporting financial reports.
The sources considered that the severity of the CBK comes in the confl ict between the financial indicators refl ected by the reports supporting some observations of the banking sector, with what is published in the financial statements of each bank, and inspections.