Statements of Position



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This proposed audit and accounting guide has been prepared to assist the independent auditor in auditing and reporting on the financial statements of credit unions. It describes relevant matters or procedures unique to these entities and focuses on specific problems of accounting, auditing, and reporting on their financial statements. This proposed guide would supersede the AICPA Audit and Accounting Guide Audits of Credit Unions issued in 1986. One objective of this proposed guide is to heighten auditors' awareness of the complex issues encountered in audits of credit unions' financial statements. Interest-rate risk, liquidity, asset quality, and internal control structure are among the most important concerns in the credit union industry. These areas should also be essential considerations in the auditor's assessment of risk at the financial statement level. A credit union's management must exercise considerable skill and judgment to manage interest-rate risk and maintain liquidity, asset quality, and an effective internal control structure. Similarly, the auditor of a credit union's financial statements should exercise considerable skill and judgment when considering these matters in planning and performing an audit. Interest-rate risk, liquidity, asset quality, internal control structure, and their effect on the auditor's consideration of risk at the account-balance or class-of-transactions level are each discussed in this proposed guide. This proposed guide also describes relevant specific internal control structure policies and procedures and auditing procedures. Further, it stresses the need for industry knowledge and training in auditing certain areas, including the allowance for loan losses. Significant accounting matters addressed in this proposed guide include establishing an adequate allowance for loan losses, valuing real estate acquired, accounting for mortgage-banking activities, accounting for business combinations, and accounting for investment securities held by a credit union. This proposed guide includes illustrations of the form and content of financial statements for credit unions and the auditor's report thereon.

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Relational Format



Credit unions -- United States -- Auditing; Credit unions -- United States -- Accounting; Credit unions -- Standards -- United States; Bank examination -- Standards -- United States


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed audit and accounting guide : audits of credit unions ;Audits of credit unions; Exposure draft (American Institute of Certified Public Accountants), 1992, March 20



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