Audit Frequency, Independence, and Standards

(1) Your credit union must be audited annually for each fiscal year. The audit must cover the period elapsed since the prior annual audit. The requirements differ based on the credit union’s total asset size, as described in 209 CMR 43.05(1)(a) through (c). (a) If your credit union has less than $5,000,000 in total assets, the Auditing Committee can choose to either: have the audit performed by an independent certified public accountant; conduct an Auditing Committee Review; or engage a qualified individual other than a certified public accountant to conduct such a review. If you choose to conduct an Auditing Committee Review, in all cases the review shall follow, at a minimum, the procedures specified in the NCUA Supervisory Committee Guide for Federal Credit Unions. Each of your credit union's annual audits shall, at a minimum, test the credit union's assets, liabilities, equity, income, and expenses for existence, proper cut off, valuations, ownership, disclosures and classification, and internal controls. (b) If your credit union has between $5,000,000 and $50,000,000 in total assets, the annual audit requirements described above for those credit unions under $5,000,000 in total assets apply. However, your credit union must have an audit performed by an independent certified public accountant at least every three years. (c) If your credit union has greater than $50,000,000 in total assets, you must have an audit performed by an independent certified public accountant annually. (2) During the course of such audit, the Auditing Committee shall make themselves reasonably available for consultation with the qualified individual conducting the audit. At the conclusion of the audit, the Auditing Committee shall review the audit report prepared by the qualified individual. Operating management of the credit union may also be present for the purpose of responding to specific questions raised by the audit report. It should be emphasized that the qualified individual shall report only to the Auditing Committee, and not to the management of the credit union. The Auditing Committee shall report the findings of the annual audit, including significant deficiencies and material weaknesses, to the board of directors of the credit union upon completion of the audit. The written report shall be available for review by any examiner of the Commissioner. The Auditing Committee shall ensure the timely and adequate completion of the annual audit or Auditing Committee Review under GAAS auditing procedures. The annual audit required by 209 CMR 43.03 shall constitute the annual audit required by M.G.L. c. 171, § (3) A duly licensed certified public accountant or qualified individual, performing audits for the Auditing Committee, must be independent of the credit union's employees; members of the board of directors, the Auditing Committee, the Credit Committee, if any, or the credit union's loan officers; and members of their immediate families. Such auditors shall not be members of the credit union.