##rtify, based on internationally - accepted accounting standards, that the financial statements of the entities are accurate – that is, it is a “ true and fair view ” of the institution ’ s financial position for the period in which such statements are prepared. although the auditor ’ s report is normally intended for the shareholders, the acts that the bank administers, including the banks and financial institutions act, superannuation ( general provisions ) act, life insurance act and savings and loans societies act, require the auditor to report to bank on any matters where the auditor has reasonable grounds for believing that the institution is insolvent, at significant risk or the state of affairs of the financial institution will materially affect depositors, policyholders, and contributors. the auditor ’ s opinion helps to establish the credibility of the financial statements, and the bank, as the supervisor, would normally rely on this opinion and use the accounts to verify and complement the periodic financial reports received from the financial institutions. the bank, as the prudential supervisor of licensed financial institutions, also wants to see the role of external auditor extended to include conducting compliance auditing. the bank would like to see licensed financial institutions attest their internal control systems, conduct checks and balances on the governance structures, and issue comprehensive disclosure statements, including disclosures along a number of risk dimensions, and be approved by the external auditors. this should assist license holders to comply with the prudential requirements of the acts. in summary, the bank would like to have a tri - partite approach in the supervision of the licensed financial institution, which is important for fostering closer working relationships, particularly with the external auditors. consequently, auditors will require better understanding of the supervisory concerns in order to help them perform their audit functions and thus report adequately on those requirements. an example of such arrangement is the tri - partite meeting arrangements between the bank, financial institutions licensed under the banks and financial institutions act and their external auditors, where the licensed financial institutions are required to provide a statement on compliance on all prudential standards and fx limits, a declaration by the ceo, endorsed by the board on whether the board and senior management have identified key risks facing the bank, established systems to monitor those risks and whether those systems are operating effectively and are adequate having regard to the risks they are designed to control. the external auditor shall provide to the bpng a report on their opinion whether the bank has complied with all specified prudential standards and

cases may still occur, but fund lending might be restricted to true emergency cases and not be used as an instrument without an emergency need. under the strategic review, an important question is how the newly agreed framework for exceptionally large access to fund credit could be strengthened in practice. in this vein, does the proposed introduction of ” exceptional precautionary arrangements ” contribute to a strengthening of market rules or rather a weakening? would such a step towards imposing an insurer role on the imf be compatible with the fund ’ s “ risk - free ” liquidity financing mechanism that designates official reserves as the source of short - term fund credit? in february 2003 the imf concluded that exceptional access should be reserved for truly exceptional cases, access limits must be strictly adhered to, and the four criteria for exceptional access must be fulfilled. will the agreed principles pass future tests? alternatively, should the fund have a free hand in resolving crises? the role of the fund in helping low - income countries is also being hotly debated. admittedly, the fund has a role to play in contributing to macroeconomic stability as an essential requirement for sustained growth and, thus, for effective poverty reduction in low - income countries through surveillance, technical assistance and financial support. however, does this justify a long - term financial involvement of the fund in these countries or should other development - oriented institutions accept chief responsibility? as a monetary institution, should the fund not continue to focus on shortterm adjustment needs? another key issue in the strategic review debate is surveillance. many useful surveillance initiatives have already been launched in recent years, including standards and codes, roscs, fsaps, and the increase in transparency. by strengthening bilateral, regional and multilateral surveillance, the fund can make useful key contributions aimed at achieving and maintaining stability worldwide and thus bolstering growth. fund surveillance increases transparency in financial markets and improves the functioning of the market mechanism. based on profound experience gained from the different regions of the world, the fund is an unbiased arbiter to give policy advice. i am convinced that the imf has done an excellent job so far in helping member countries adapt to a changing economic environment. in a process of trial and error, the fund has become a more open and accountable institution and a major source of information for the general public and capital market participants. the future role and priorities of the fund and its instruments should be carefully reviewed. a greater selectivity with regard to functions and a sharper