The National Credit Union Administration wants to require all credit unions to force outside auditors to sign contracts specifying exactly what services they are providing to the institution.
Services that must be detailed in the contract include: testing internal controls and searching for problems with the accounting of cash, loans, and investments. The proposal will likely be finalized at the July 24 board meeting.
"This sets up terms for a firm contract between the credit union and an outside auditor, so they know exactly what they're getting," said Timothy Pryor, director of regulation and compliance with the National Association of Federal Credit Unions.
The proposal also requires internal and external auditors to follow generally accepted accounting principles when ruling on a credit union's policies.