Audit of financial enterprises
Institutions supervised by the National Bank of Hungary may only be audited by an auditor holding the relevant chamber qualification. With us all eight qualifications are in one pair of hands: financial institutions, investment firms, pension funds, insurance, issuers, IFRS, public sector and sustainability.
Who we audit
Which institutions do we audit?
In the regulated sector an audit is not a question of size: at organisations supervised by the National Bank of Hungary the audit is part of lawful operation and requires the auditor to hold a chamber qualification. We hold the necessary qualification and have practical experience at the following types of institution.
- Financial enterprises. Companies engaged in lending, financial leasing, factoring and receivables management — including those subject to prudential regulation equivalent to that of credit institutions.
- Credit institutions. Audit of the annual financial statements and supervisory reporting of banks, cooperative credit institutions and branch offices.
- Investment firms. Investment service providers and companies providing ancillary services, including verification of the segregated handling of client assets.
- Fund managers and investment funds. Audit of the annual financial statements of fund management companies and of the investment funds they manage.
- Insurers and insurance intermediaries. With the insurance qualification, reviewing the background to technical provisions and the solvency capital calculation.
- Pension and benefit funds. Voluntary and private pension funds, health funds and mutual aid funds — with the pension fund qualification.
- Issuers. Companies issuing securities admitted to a regulated market, with the issuer qualification and IFRS experience.
- Public sector and state-owned organisations. On the basis of the public sector qualification: state- and municipality-owned companies and grant-funded organisations.
The focus of the audit
What we look at in the audit of a financial institution
The financial statements of credit institutions and financial enterprises must be prepared under Government Decree 250/2000 (XII. 24.), and credit institutions and financial enterprises subject to equivalent prudential regulation must prepare separate financial statements under IFRS. The audit is therefore not only an accounting question but a prudential one.
- Portfolio classification and impairment. Classification of the loan portfolio, the methodology for impairment and provisions, the model parameters and the soundness of collateral valuation.
- Revenue recognition. Accrual of interest and fee income, application of the effective interest rate, and the accounting treatment of contract modifications and restructurings.
- Capital adequacy. The components of own funds and the source data of the capital requirement calculation, and the consistency of the financial statements with prudential reporting.
- Supervisory reporting. Reconciliation of the regular reporting to the National Bank of Hungary with the general ledger and the financial statements.
- The internal control system. Control points in the lending, payment and record-keeping processes, segregation of duties and the operation of approval rules.
- Outsourced activities. Review of the contracts, controls and reports relating to outsourced processes — responsibility remains with the client.
- Anti-money-laundering obligations. Review of the operation of the customer due diligence and record-keeping system, to the extent relevant to the financial statements.
- Related parties and owner transactions. Identification of transactions with related parties, their terms and their presentation in the financial statements.
The auditor has a duty to report. Under the law, the auditor of a financial institution must inform the National Bank of Hungary without delay if, during the audit, they identify a circumstance that endangers prudent operation or the institution’s compliance with the law. We clarify this role at the start of the engagement so that supervisory communication is predictable.
Why us
Qualification, experience, responsibility — open to verification
In the regulated sector the client cannot afford to experiment: the auditor must hold the qualification and know the sector from the first day of the engagement. All of the following can be checked in public registers.
Request a quote
Looking for an auditor in the regulated sector?
Tell us what kind of institution it is and when the current engagement expires — we will give a quote after checking the qualification requirements.