The National Credit Union Administration is under fire from accountants upset by a new auditing rule scheduled to take effect Dec. 31.

The American Institute of Certified Public Accountants charges NCUA is encouraging credit unions to hire unlicensed accountants to conduct full- scale financial statement audits - a task they are barred by state law from doing.

According to Barry C. Melancon, the group's president and chief executive, the rule "threatens the National Credit Union Share Insurance Fund, the safety and soundness of the credit union system, and the public interest.

"We find it incredible that the NCUA ... would continue to encourage and rely on work of nonlicensed accountants," Mr. Melancon wrote last month in a letter to NCUA chairman Norman E. D'Amours.

But in an interview Tuesday, David Marquis, NCUA director of examinations and insurance, said the agency has had few problems with unlicensed accountants auditing credit unions. He also denied the agency is violating state laws.

"Our statute requires (credit union) supervisory committees to conduct an audit every year," he explained. "But it does not define who must do the audit ... Technically speaking, you don't even have to be an accountant."

The two sides have scheduled - and canceled - two meetings to iron out their differences. The trade group scrubbed a meeting set for Monday after the agency invited other accountants to attend.

The regulations, which were proposed in October 1995 and finalized July 24, were created to help credit union audit committees understand the accounting services they purchase, according to Mr. Marquis.

The new rule requires a credit union to get an engagement letter from an auditor "so they know what they are buying," he said. Under the rule, the NCUA makes clear that examiners have access to all work papers produced by the auditor. Finally, the rule clarifies what the NCUA means when it says audits must be "done in accordance with professional standards," Mr. Marquis said.

It's this clarification that troubles AICPA officials, who argue NCUA is requiring such a broad scope of work to meet those "professional standards" that only a licensed accountant is qualified to do the audit.

"A financial statement audit is what in substance the NCUA is requiring," James F. Green, the group's technical manager for professional standards, said in an interview Tuesday. "But they are saying to others that it is not."

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