The final rule updates outdated provisions and provides additional flexibility to federally insured credit unions with less than $500 million in assets while continuing to ensure appropriate financial oversight.
A federal credit union’s supervisory committee is required by the Federal Credit Union Act to make an annual audit and submit a report of that audit to the board of directors and present a summary of the report to the members at the next annual meeting of the credit union.
In general, federally insured credit unions having total assets of $500 million or greater “must obtain an annual audit of its financial statements performed in accordance with Generally Accepted Auditing Standards by an independent person who is licensed to do so by the State or jurisdiction in which the credit union is principally located”.
The final rule eliminates two of the audit types that federal insured credit unions rarely use: the Report on Examination of Internal Controls over Call Reporting option and the Balance Sheet Audit option.
The final rule also removes the NCUA’s Supervisory Committee Guide as an alternative to a financial statement audit in section 715.7(c) and replaces this option with a new Appendix to Part 715 covering minimum supervisory committee audit requirements.
In addition, the NCUA plans to publish reference materials on audit procedures to provide up-to-date resources and greater flexibility for FICUs in conducting audits under the new Appendix.
The final rule also changes the prescriptive 120-day deadline for computing and delivering an audit report by an outside compensated auditor to a target delivery date that allows the federal credit union to timely meet its annual audit requirements.
Additional details can be found on the CompBlog entry.