Terms of Reference: External Auditors
Background and Introduction
Standard Lesotho Bank (SLB or the Bank) is a licensed banking institution registered under the laws of Lesotho and regulated by the Central Bank of Lesotho. The Bank is a subsidiary of Standard Bank Group (SBG or the Group). The Bank has 16 branches across all the districts in Lesotho. The Bank has three business segments, namely: Corporate & Investment Banking (CIB), Business & Commercial Banking (BCB) and Private & Personal Banking (PPB). The Bank is operating in a highly regulated environment that requires it to uphold highest level of integrity and ethical standards that engender trust in all its operations.
In keeping with the best corporate governance standards, auditing standards and the regulatory requirements the Bank is required to engage different external auditors after every five years to comply with the principle of independence and ensure reality on the work of external auditors.
Therefore, the Bank wishes to invite all the qualified and competent audit firms in Lesotho to submit their expression of interests to provide the external audit services in accordance with the Terms of Reference (TOR) as stipulated below.
Objective
The objective of the Bank is to find and engage a qualified audit firm to undertake annual statutory audit and report to the Board of Directors and shareholders of SLB for the next five years starting from the financial year-ending 31st December 2025.
External Audit Services Assignment
The assignment is intended to obtain reasonable assurance as to whether the key financial statements free from material misstatements whether due to fraud or error, and to issue an independent auditor’s report that includes the Auditor’s opinion. The audit should be conducted in accordance with International Standards on Auditing that require strict compliance with ethical requirements. It is also expected of the Auditor to exercise professional judgement during the audit.
During the Audit, the Auditor should be watchful and report:
● Any significant or unusual transactions that the Bank entered that management or Board of Directors should be made aware of.
● Any deficiencies in internal controls that are of importance to merit the attention of management and the Board of Directors.
● Any disagreements with management about matters which are significant to the Bank’s financial statements.
● Any lack of compliance with financial management and controls policies.
● Any lack of compliance with any other relevant legislation.
● Any fraudulent activity, known or suspected, perpetrated by any directors, officers or staff members of the Bank.
● Any lack of accountability in the use and management of Standard Lesotho Bank assets.
● The auditor shall have free and unfettered access to the Chairman of the Board Audit Committee and shall report any significant findings within reasonable time of discovery.
All such instances should be reported in the management letter.
Scope of the work
· Establishing an understanding of internal controls relevant to the audit to design their audit procedures that are fit for purpose.
· Carry out tests of transactions as are necessary, to obtain an understanding of the accounting system, to assess its adequacy as a basis for the preparation of the Financial Statements and to establish whether adequate records have been maintained as required by the Standard Lesotho Bank policies and procedures manual, the Companies Act 2011 and other Statutes governing company law in Lesotho and International Financial Reporting Standards (IFRSs).
· Review Significant Contracts and Agreements entered by Standard Lesotho Bank with third parties to identify significant terms and conditions of those Agreements as part of understanding the Bank’s operations.
· Confirm that all necessary transactional documents, records and accounts are kept in line with document retention policy.
· Confirm that the financial statements have been prepared in accordance with International Financial Reporting Standards and present fairly the Statement of Financial Position, the Income Statement, Statements of Comprehensive Income, Cash Flow and Changes in Equity for the relevant financial year in scope, together with a summary of significant accounting policies and other explanatory notes.
Financial Statements:
The Financial Statements among others include:
a. Statements of Income Statement and Other Comprehensive Income;
b. Statements of Financial Position reflecting the assets and liabilities;
c. Statements of Cash Flows;
d. Statements of Changes in Equity;
e. The Accounting Policies Adopted and Explanatory Information
f. Applicable Sections of the Capital and Risk Management Annexure
Note: The above-defined scope does not in any way restrict the audit procedures or the techniques that the auditor may wish to use in forming an opinion on the Financial Statements and Financial Packages being audited.
Deliverables
· Interim audit report findings
· Final annual audit report findings
· Management statement Report.
· Assessment of the current exchange control processes including AML, propose enhancements to the processes and re-engineer the processes as agreed with the Bank. The result should be better quality and efficient processes as defined.
Requirements:
1. Experience and Profile
Summary of similar assignments executed successfully in the past three to five (3-5) years; focusing on brief description of assignments and country of residence i.e. description of similar assignments executed and references of where the assignments were executed as follows:
- Audit Engagement Title
- Engagement Partner and Quality Control Review Partner (i.e. minimum of 2 Partners on the assignment)
- Audit Manager
- Engagement Team
- Strength, depth and location of technical specialist teams (for example as relate to IFRS 9 interpretation and recognition practice)
- Audit Duration
- Audit Brief
2 Auditor’s Experience and Qualifications
i. The audit firm should be a registered member of the Lesotho Institution of Accountants (LIA), possesses a valid tax certificate and valid practicing certificates for the engagement partners.
ii. The Audit firm must demonstrate experience in the audit of banking institutions as well as that of its key engagement personnel.
iii. The key audit team will comprise, at least:
a) An engagement partner – indicate number of years of experience in auditing, and specifically public interest entities and / or banking and financial services sector exposure. In addition, he/she should be a member of the LIA;
b) A quality review partner – indicate number of years of experience in auditing, professional qualifications as well as country of residence;
c) Audit Manager(s) with relevant audit expertise, appropriate qualifications and of experience, including membership of LIA.
Mandatory Briefing Session
All prospective bidders/auditors are expected to attend briefing sessions. Failure to attend briefing sessions will lead to disqualification
Briefing Session Date: 28th January 2025
Submission Requirements
Mode of submission: Interested audit firms should ask for detailed terms of reference from: [email protected] or call 22212816, who will in turn directly issue TORs to interested firms through Coupa system.
The submission must be made in two separate files/attachments: One labelled “Technical Bid” and the other labelled’ “Commercial Bid”.
Date of submission: 04 February 2025