What procedures are performed during the Annual Audit?

The engagement is actually a “Supervisory Committee Agreed-Upon Procedures Engagement” even though many credit unions
commonly refer to it as the “annual audit”.  In the engagement letter signed by Financial Controls, Inc. and the Supervisory
Committee, the specific procedures to be performed are delineated and agreed-upon.  These procedures are categorized as:

  • Current findings & recommendations
  • Financial statements review
  • Financial ratios review
  • Internal control review
  • Policies & procedures review
  • Board of Directors minutes & activities review
  • Supervisory Committee minutes & activities review
  • Regulatory examination review
  • Prior Supervisory Committee audit review
  • Insurance coverage review
  • Loan review & accounting
  • Allowance For Loan Losses review & accounting
  • Cash accounting & verification
  • Investments accounting & verification
  • Accrued Interest Receivable accounting
  • Prepaid Expenses accounting
  • Fixed Assets accounting
  • Other Assets accounting
  • Accounts Payable accounting
  • Notes Payable accounting
  • Dividends Payable and Accrued Dividends accounting
  • Accrued Expenses accounting
  • Other Liabilities accounting
  • Shares accounting
  • Equity accounting
  • Income & Expenses accounting

A more detailed listing of procedures is available upon request and is included in the engagement agreement.



What will the Engagement Report include?

The engagement report will include four sections:

1.        Report Cover Letter - a letter specifying the nature and scope of the engagement

2.        Findings and Recommendations – specific discoveries of a material or important nature

3.        Financial Statement & Ratio Review – statement of position, statement of performance, and a review of key financial ratios

4.        Procedures Performed – a summary of the procedures performed
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Annual Audit