The American Institute of CPAs said Monday that it supports a new policy from the National Credit Union Administration on how audit reports on credit unions should be submitted.

In May, the NCUA, which regulates and insures thousands of federally insured credit unions, updated its policies, saying external auditors could either forward their audit reports directly to the regulator, provide time for physical inspection of the document at a specified time or place, or use “a secure portal that verifies and validates the original document source and ensures the audit report submitted to NCUA is authentic and unaltered.”

The policy change is expected to apply to all federally insured credit unions and aims to minimize the risk of manipulation of the audit reports by management at the credit unions. The new requirement prompted some concerns at some CPA firms, though, because the act of forwarding an audit report directly to an agency such as the NCUA is considered a management function, which could impair an outside auditor’s independence. At the AICPA’s request, the NCUA agreed to accept an online delivery option for the documents. The AICPA noted that the Rivio Clearinghouse online system, which its CPA.com technology arm developed in collaboration with Confirmation.com, meets the criteria and is already being used for NCUA submissions.

“The policy change was designed to preserve the integrity of the auditor’s report, but inadvertently raised issues for external auditors,” said AICPA Depository Institutions Expert Panel chair and Crowe Horwath partner Sydney Garmong in a statement. “We’re grateful that the NCUA heard our concerns and agreed to acceptable alternatives to preserve auditor independence.”

AICPA building in Durham, N.C.
AICPA building in Durham, N.C. Photo: AICPA

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Michael Cohn

Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.