46 NAC 3-004. INDEPENDENCE

004 INDEPENDENCE. 004.01 If the Supervisory Committee chooses to cause the books and records of the credit union to be audited, the audit, to be acceptable, must be completed by a qualified certified public accountant or certified public accounting firm who is in fact independent. An accountant or accounting firm, will not be considered to be independent, if he, she, or it: 004.01A is connected with the credit union as an officer, committee member, director, attorney, or employee, or is a member of the immediate family of an officer, committee member, director, attorney, or employee of the credit union or any of its affiliates; 004.01B is the beneficial owner, directly or indirectly, of 5% or more of the shares of the credit union; 004.01C is a borrower from the credit union; 004.01D makes entries or postings of the books of account or performs any other operating functions for the credit union; 004.01E or any partner or principal of the accounting firm that receives any special consideration in any transaction with the credit union or has any interest, direct or indirect, financial or otherwise, in any real property owned by or securing any loan made by the credit union, or in any other operating activity or function of the institution; or has any substantial conflict of interest, or the appearance thereof, by reason of business or personal relationships with management or those individuals who are in a position to influence management or its decisions or functions. 004.02 An accounting firm which has a member who is not considered independent shall exclude such accountant from any personal involvement in the audit. 004.03 The foregoing requirements are not to be construed as all-inclusive criteria in judging the independence of an accountant or accounting firm, but rather as setting forth the most common conditions which contribute to a lack of independence. The certified public accountant or certified public accounting firm must adhere to the American Institute of Certified Public Accountants' rules for independence, unless further restricted by the rules or interpretations of the Department. It is the responsibility of an accountant or accounting firm to disclose to the Department any unusual relationships or affiliations which he or she or any member may have with the credit union, or any persons closely connected with the credit union, and to have resolved any questions as to his, her, or its independence before proceeding with the engagement. The accountant or accounting firm must state specifically in the report of audit or supervisory committee audit that he, she, or the accounting firm has met the test of independence specified above and that he, she, or the accounting firm is in fact independent.