Section 73.07. Requirements for verification of accounts and passbooks.

  At least once every two years, accounts which include passbooks, statement of accounts or other account records of the members shall be verified against the records of the credit union. Any of the following verification methods may be used:

(1)   Controlled. A controlled verification of 100% of members' share and loan accounts.

(2)   Statistical. A sampling that includes all of the following:

(a) Random selection.

(b) A sample which is representative of the population from which it was selected.

(c) An equal chance of selecting each dollar in the population.

(d) Sufficient accounts in both number and scope on which to base conclusions concerning management's financial reporting objectives.

(e) Additional procedures to be performed if evidence provided by confirmations alone is not sufficient.

(3)   Non-statistical. When verification is performed by an independent state-licensed person, the auditor may choose among the sampling methods set forth in subs. (1) and (2) , and non-statistical sampling methods consistent with GAAS, if the sampling methods include all of the following:

(a) Sufficient accounts in both number and scope on which to base conclusions concerning management's financial reporting objectives to provide assurance that the general ledger accounts are fairly stated in relation to the financial statements taken as a whole.

(b) Additional procedures to be performed by the auditor if evidence provided by confirmations alone is not sufficient.

(c) Documentation of the sampling procedures used and of their consistency with GAAS. The documentation shall be provided to the director or NCUA, or both, upon request.

(4)   Retention of records. The records of each verification of member passbooks and accounts shall be retained by the credit union until the next verification of member passbooks and accounts is completed.

History: CR 02-133 : cr. Register February 2004 No. 578 , eff. 3-1-04.