EN ECB-PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 3 June 2016  
on the internal audit of Българска  народна  банка  (Bulgarian National Bank) 
(CON/2016/30) 
 
Introduction and legal basis 
On 27 April 2016 the European Central Bank (ECB) received a request from the National Assembly of the  
Republic of Bulgaria for an opinion on a draft law amending and supplementing the Law on the internal 
audit in the public sector and amending the Law on Българска  народна  банка  (Bulgarian National Bank 
(BNB)) (hereinafter the ‘draft law’). 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent of Article 2(1) of Council Decision 98/415/EC1, as 
the draft law relates to a national central bank. In accordance with the first sentence of Article 17.5 of the 
Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion. 
 
1.  Purpose of the draft law 
1.1  The purpose of the draft law is to amend the law on BNB in order to improve the organisation and 
the legal framework for the internal audit of BNB. The draft law provides that the internal audit of 
BNB is undertaken by an internal audit unit managed by a chief auditor. In order to be appointed 
BNB’s chief auditor and the auditors of the internal  audit unit must meet the requirements set out in 
the Law on internal audit in the public sector2. 
1.2 Pursuant to the draft law the internal audit of BNB is undertaken in compliance with the 
international standards for the professional practice  of internal auditing, the Code of Ethics of 
Internal Auditors, the rules of the Internal Audito rs Committee of the European System of Central 
Banks (ESCB) and the rules of operation adopted by BNB’s Governing Council. 
1.3  The draft law provides that the objectives, powers, responsibilities, audit plan and activity report of 
the internal audit of BNB is approved by BNB’s Governing Council. 
 
2. Observations  
2.1  The ECB welcomes that the draft law clarifies that the internal audit of BNB is undertaken in 
compliance with the international standards for the professional practice of internal auditing and the 
rules of the Internal Auditors Committee of the ESCB. In this regard th e Audit Charter for the 
                                                 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
2  See Article 19(2) of the Law on internal audit in the public sector.  
ECB-PUBLIC  
 
2 Eurosystem/ESCB and the Single Supervisory Mechanism3 (hereinafter the ‘Audit Charter’) refers 
to and supplements the Institute of Internal Auditors’ (IIA) International Standards for the 
Professional Practice of Internal Auditing (hereinafter the ‘IIA Standards’)4 and the IIA Code of 
Ethics5. In particular IIA Standard 1210, which is reflected in the Audit Charter, provides that 
internal auditors must possess the knowledge,  skills and other compet ences needed to perform 
their individual responsibilities. Moreover the inte rnal audit activity collectively must possess or 
obtain the knowledge, skills, and other com petencies needed to perform its responsibilities. 
2.2 Against this background, the draft law requires that BNB’s chief auditor and the auditors in the 
internal audit unit meet the requirements for the appointment of internal auditors set out in the Law on internal audit in the public sector
6. In accordance with these requirements internal auditors must 
have a ‘Public Sector Internal Auditor’ certificate issued by the Minister of Finance, an IIA ’Certified Internal Auditor’ certificate , or an IIA ‘Certified Government Auditing Professional’ certificate
7. The 
ECB notes in this regard that the IIA encourages internal auditors to demonstrate proficiency by 
obtaining appropriate certifications and qualifications8. The draft law requires internal auditors to 
have one of these certificates when they are recruited. Although this requirement does not 
correspond to a specific IIA recommendation, the objective of having formal professional 
qualifications for the internal audit function is clearly acknowledged by the ECB. However, the 
limitation to specific certifications may unduly di scriminate against other relevant and internationally 
recognised certifications and qualifications in the field of auditing, control, risk management, fraud 
and corporate governance9. In addition the ’Public Sector Internal Auditor’ certificate does not 
appear to correspond to the specific tasks of a central bank and may be less pertinent to a central 
bank’s internal audit function than a requirement for higher education in a relevant field. Therefore, 
the ECB recommends that careful attention be given to not unreasonably limiting the recruitment of appropriately qualified technical experts into BNB’s internal audit unit, as this may affect the proper 
balance and mixture of skills within  the internal audit function, th us potentially affecting BNB’s 
autonomy in staff matters as referred to in paragraph 2.3. 
2.3  The ECB considers that the date of entry into force of the draft law, currently foreseen for 1 
January 2017, introduces an element of uncertainty as regards the feasibility of the provision, since 
BNB’s chief auditor and the auditors in the internal audit unit would have to obtain the certificates 
mentioned in paragraph 2.2 of this Opinion by that date unless they already have such certificates
10. As noted in past ECB Convergence Reports, autonomy in staff matters, an aspect of 
the principle of central bank financial independence, implies that a national central bank may not be put in a position where it has limited control or no control over its staff, or where the government of 
a Member State may influence its policy on staff ma tters. The ECB considers it important that the 
                                                 
3   Published on the ECB’s website at www.ecb.europa.eu. 
4   The IIA  Standards are published on the IIA’s  website at www.theiia.org. 
5   The IIA Code of Ethics is published on the IIA’s website at www.theiia.org 
6   See Article 22(4) of the draft law. 
7   See Article 19(2) and §1 of the Law on the internal audit in the public sector. 
8   See the interpretation accompanying IIA Standard 1210. 
9    Such as the certifications offered by the Association of Chartered Certified Accountants and the certificates of Certified 
Public Accountant, Chartered Financial Analyst, Certified Fraud Examiner and Certified Information Systems Auditor.  
10   In accordance with Ordinance No. 6 of the Minister of Finance of 29 June 2006 the examination for the ’Public Sector 
Internal Auditor’ certificate is carried out once a year in June.   
ECB-PUBLIC  
 
3 National Assembly of the Republic of Bulgaria ensures that the draft law provides for a sufficient 
timeframe to give BNB’s chief auditor and the auditors in the internal audit unit the opportunity to meet the new certification requirements. Therefore, the ECB recommends that the date of entry 
into force should be decided in close and effective cooperation with BNB, taking due account of its views so as to preserve BNB’s autonomy in staff matters. 
 
This opinion will be published on the ECB’s website. 
 
 Done at Frankfurt am Main, 3 June 2016. 
 
[signed]  
The President of the ECB Mario DRAGHI