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 13-03-25-01 - Definitions

Current through Supplement No. 393, July, 2024
1. "Compensated person" means any accounting
				or auditing professional, excluding a credit union employee, who is compensated
				for performing more than one supervisory committee audit or verification of
				members' accounts per calendar year, or both.
2. "Confirm" or "confirmation" refers to a
				written verification with a third-party person or organization pertaining to an
				account balance or condition. Examples of confirmation letters are bank or
				corporate credit union account confirmation, investment account confirmation,
				borrowing or line of credit confirmation, attorney letter confirmation, and
				member share or loan account confirmation.
3. "Financial statement audit" or "opinion
				audit" means an audit of the financial statements of a credit union performed
				in accordance with GAAS by an independent person who is licensed by the state.
				The objective of a financial statement audit is to express an opinion as to
				whether those financial statements of the credit union present fairly, in all
				material respects, the financial position and the results of its operations and
				its cashflows in conformity with GAAP, as defined herein.
4. "GAAP" means generally accepted accounting
				principles, which refers to the conventions, rules, and procedures which define
				accepted accounting practice. GAAP includes both broad general guidelines and
				detailed practices and procedures, provides a standard by which to measure
				financial statement presentations, and encompasses not only accounting
				principles and practices but also the methods of applying them.
5. "GAAS" means generally accepted auditing
				standards, which refers to the standards approved and adopted by the American
				institute of certified public accountants which apply when an independent,
				licensed certified public accountant audits financial statements. Auditing
				standards differ from auditing procedures in that "procedures" address acts to
				be performed, whereas "standards" measure the quality of the performance of
				those acts and the objectives to be achieved by use of the procedures
				undertaken. In addition, auditing standards address the auditor's professional
				judgment exercised in performing the audit and in preparing the report of the
				audit.
6. "Independent" means the
				impartiality necessary for the dependability of the compensated auditor's
				findings. Independence requires the exercise of fairness toward credit union
				officials, members, creditors, and others who may rely upon the report of a
				supervisory committee audit report.
7. "Internal control" means the process,
				established by the credit union's board of directors, officers, and employees
				designed to provide reasonable assurance of reliable financial reporting and
				safeguarding of assets against unauthorized acquisition, use, or
				disposition.
8. "Materiality"
				refers to a statement, fact, or item, which, giving full consideration to the
				surrounding circumstances as they exist at the time, it is of such a nature
				that its disclosure, or the method of treating it, would be likely to influence
				or to make a difference in the judgment and conduct of a reasonable person.
				Materiality should take into account ending balances as well as the volume of
				transactions in an account. Typically, balances or transaction volume greater
				than five percent of the credit union's net worth should be considered
				material.
9. "Reportable
				conditions" means a matter coming to the attention of the independent,
				compensated auditor which in the auditor's judgment represents a significant
				deficiency in the design or operation of the internal control structure of the
				credit union which could adversely affect its ability to record, process,
				summarize, and report financial data consistent with the representations of
				management in the financial statements.
10. "Review" refers to the examination of
				board minutes, policies and procedures, and a review of a sample portion of
				activities, rather than all of the activities.
11. "State-licensed person" means a certified
				public accountant or public accountant who is licensed by the state to perform
				accounting or auditing services for that credit union.
12. "Test" refers to procedures applied to
				the individual items that compose an account balance or class of transactions.
				The tests involve confirmation, inspection, or observation procedures to
				provide evidence about the recorded amount.
General Authority:
NDCC 6-01-04
Law Implemented:
NDCC
					 6-06-06