North Dakota Administrative Code
Title 13 - Department of Financial Institutions
Article 13-03 - Credit Unions
Chapter 13-03-25 - Supervisory Committee Audits and Verifications
Section 13-03-25-05 - Assistance from outside, compensated person

Universal Citation: ND Admin Code ยง 13-03-25-05

Current through Supplement No. 392, April, 2024

1. Unrelated to officials. A compensated auditor who performs a supervisory committee audit on behalf of a credit union may not be related by blood or marriage to any management employee, member of either the board of directors, the supervisory committee, or the credit committee, or loan officer of that credit union.

2. Engagement letter. The engagement of a compensated auditor to perform all or a portion of the scope of a financial statement audit or supervisory committee audit shall be evidenced by an engagement letter. In all cases, the engagement must be contracted directly with the supervisory committee. The engagement letter must be signed by the compensated auditor and acknowledged therein by the supervisory committee prior to commencement of the engagement.

3. Contents of letter. The engagement letter shall:

a. Specify the terms, conditions, and objections of the engagement;

b. Identify the basis of accounting to be used;

c. If a supervisory committee guide audit, include an appendix setting forth the procedures to be performed;

d. Specify the rate of, or total, compensation to be paid for the audit;

e. Provide that upon completion of the engagement letter, the auditor shall deliver to the supervisory committee a written report of the audit and notice in writing, either within the report or communicated separately, of any internal control reportable conditions or irregularities or illegal acts, if any, which come to the auditor's attention during the normal course of the audit, i.e., no notice required if none noted;

f. Specify a target date of delivery of the written reports with such delivery date enabling the credit union to meet its annual audit requirements;

g. Certify that department of financial institution staff or national credit union administration staff, or both, will be provided unconditional access to the complete set of original working papers, either at the offices of the credit union or at a mutually agreed-upon location, for purposes of inspections; and

h. Acknowledge that working papers shall be retained for a minimum of three years from the date of the written report.

4. Complete scope. If the engagement is to perform a supervisory committee guide audit intended to fully meet the requirements of subdivision b of subsection 3 of section 13-03-25-03, the engagement letter shall certify that the audit will address the complete scope of that engagement.

5. Exclusions from scope. If the engagement is to perform a supervisory committee guide audit which will exclude any item required by the applicable section, the engagement letter shall:

a. Identify the excluded items;

b. State that, because of the exclusions, the resulting audit will not, by itself, fulfill the scope of the supervisory committee audit; and

c. Caution that the supervisory committee will remain responsible for fulfilling the scope of a supervisory committee audit with respect to the excluded items.

General Authority: NDCC 6-01-04

Law Implemented: NDCC 6-06-06

Disclaimer: These regulations may not be the most recent version. North Dakota may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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