Brazil: Audit Committees In The Brazilian Financial System

Last Updated: 5 February 2004

By Walter Douglas Stuber 1

Pursuant to the regulations attached to Resolution 3081, of May 29, 2003, as amended by Resolution 3170, of January 30, 2004, both issued by the Brazilian Monetary Council, any financial institution or entity duly authorized to operate by the Central Bank of Brazil (Bacen), that at the end of the last two financial years (i) has an equity equal to or higher than R$ 1 billion; or (ii) is responsible for the management of third party’s funds equal to or exceeding R$ 1 billion; or (iii) has raised a total amount of deposits plus third party management funds equal to or exceeding R$ 5 billion, must create an Audit Committee (Comitê de Auditoria), which will report directly to its Board of Directors (Conselho de Administração) or, in the absence thereof, to its Board of Officers (Diretoria). The Audit Committee for the first two periods corresponding to the financial years ending 2002 and 2003 will have to be fully operative by July 1st, 2004, and for the subsequent periods by March 31 of the subsequent financial years, and it will consist of at least three members, whose terms of office may not exceed five years in the case of publicly-held institutions with stock exchange listed shares and no fixed term of office for the closely-held institutions.

The number and the criteria for nomination, replacement and remuneration of members; the term of office and duties and authority of the Audit Committee must be expressly provided for in the company’s by-laws or articles of association. At least one of the committee members must have proven knowledge and expertise in accounting and auditing. A member can only be nominated for the Audit Committee of the same institution after a minimum three-year period counted as from termination of his/her previous term of office.

The following are conditions to being a member of the Audit Committee: (i) the individual is not, or was in the preceding twelve months, an officer of the relevant institution or any of its connected companies (the only exception is the closely-held institution, in which case this restriction does not apply), or an employee of the institution or any of its connected companies; or the head technician, officer, manager, supervisor or any other member, with managerial duties, of the team involved with the company’s auditing; or a member of the Tax Council (Conselho Fiscal) of the institution or any of its connected companies (ii) the individual is not a direct or collateral relative or even by affinity, up to second degree relative of the individuals mentioned in item I other than a member of the Tax Council; (iii) the individual does not receive any compensation from the company or its connected companies other than that regarding their duties as member of the Audit Committee. In the case of a closely-held institution, the option between the remuneration of an officer or of a member of the Audit Committee is admitted.

In addition to the above, additional conditions apply. In the case of institutions with stock exchange-listed shares controlled by the federal, state or the Federal District governments. In this case, the individual may neither hold a permanent position (and be licensed) at any of said governments nor hold or discharge, or have held or discharged in the preceding twelve months, position or duties in any of said governments. Bacen may, however, upon properly justified request from the privately-held company, release the company from the one-year-in-office requirement. Now for privately-held companies, all members of the committee must be officers in office for at least one year, being that one of them must necessarily be the officer charged with the relationship with Bacen, irrespective of time in office.

The duties of an Audit Committee are the following:

  1. to establish the rules of the Audit Committee operation in writing, subject to approval of the Board of Directors or, in the absence thereof, the Board of Officers;
  2. to formally recommend the use or replacement of an audit firm;
  3. to review the annual reports and auditor’s opinions prior to their publication;
  4. to assess the effectiveness of independent and internal auditing for compliance with legal and regulatory provisions and applicable internal rules and codes;
  5. to confirm the implementation by the company’s management of the independent and internal auditors’ recommendations;
  6. to establish and publicize the procedures used to receive and handle information about lack of compliance with applicable rules and regulations and internal rules and codes, including arrangements to protect any disclosing party and confidentiality of information;
  7. recommendation of amendments or improvements to the company’s policies, practices and procedures;
  8. to meet with the company’s management, independent and in-house auditors on a quarterly basis to check for adherence to any recommendation, including recommendations as to audit work planning;
  9. to check for adherence to recommendations, if any, by the company’s board of officers; and
  10. to meet with the Tax Committee and Board of Directors, upon request thereof, to discuss policies, practices and procedures identified in the discharge of their duties.

Additionally, within its authority, an Audit Committee may hire the services of expert, however, it will not be discharged from its duties.

Financial conglomerates may have one single Audit Committee for all its units, appointed by the leading companies, to comply with the requirements provided in the law. However, such decision must be made, and recorded, by way of deliberation at shareholders’ meeting of each and every company member of the conglomerate.

A semi-annual report, for semesters ending June 30 and December 31, must be prepared by the Audit Committee indicating the Committee’s operation in the period. The following are also requirements to be met: evaluation of the effectiveness of internal control systems, and proof of any determined shortcomings; described recommendations to the board of officers and any recommendation not adhered to and justification; assessment of the effectiveness of independent and internal auditing for compliance with legal and regulatory provisions and applicable internal rules and codes; assessment of the quality of financial statements, specially adherence to the Brazilian generally accepted accounting practices and compliance with the Bacen rules and regulations with proof of any determined shortcomings. In this respect, Audit Committees must make available its report to the Bacen and the company’s Board of Directors for at least five years of its preparation. Another duty of the Audit Committee is the publication of a summary of the main aspect of its report together with the company’s financial statements.

1.Walter Douglas Stuber is an expert in finance law and capital market and partner of Stuber - Advogados Associados.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.