New credit union audit legislation.Congressman Bill McCollum (R-Fla.) introduced a bill that would require licensed accountants to perform external audits on federally insured credit unions. In a statement to the press, he said audits lose their effectiveness "when not performed according to professional standards by person who have demonstrated their competencies and independence in auditing." The legislation is in direct response to a final rule adopted by the National Credit Union Administration The National Credit Union Administration (NCUA) is responsible for chartering, insuring, supervising, and examining federal credit unions (FCUs) and for administering the National Credit Union Share Insurance Fund. (NCUA), which requires member credit unions to have external audits of their financial statements but does not require that the audits be based on generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting or be audited by an independent licensed accountant. Also, the Federal Credit Union Act In 1934, the U.S. Congress passed the Federal Credit Union Act, which President Roosevelt signed into law. The purpose of the federal law was to make credit available and promote thrift through a national system of nonprofit, cooperative credit unions. (FCUA) does not require credit unions to prepare written statements regarding their compliance with laws and regulations. The Credit Union Audit Improvement Act of 1997 (HR 2552) would amend the FCUA to require each federally insured credit union to * Prepare financial statements in accordance with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . * Have an independent audit of the financial statements performed by an independent licensed accountant in accordance with generally accepted auditing standards Generally Accepted Auditing Standards, or GAAS, are ten auditing standards, developed by the AICPA, consisting of general standards, standards of field work, and standards of reporting, along with interpretations. . * Prepare an annual written assertion about the effectiveness of the credit union's internal controls. * Obtain an attestation report on the credit union management's report on internal controls. * Prepare an annual written assertion concerning its compliance with safety and soundness regulations. The bill, which exempts credit unions with assets of less than $10 million, has been endorsed by the American Institute of CPAs and the National Association of State Boards of Accountancy For the technique in nucleic acid amplification, see . The National Association of State Boards of Accountancy (NASBA) is an umbrella group for the 55 state boards that regulate the accountancy profession in the United States of America. . The bill would apply to fiscal years ending on and after December 15, 1997. |
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