The National Credit Union Administration today released an addendum to its Other Supervisory Committee Audit, Minimum Procedures Guide. Accounting Standard Codification No. 326 Financial Instruments—Credit Losses, referred to as Current Expected Credit Losses (CECL), became effective for most credit unions on January 1, 2023. For credit unions that have implemented CECL, the addendum replaces procedures based on recent changes in accounting standards from CECL for the Allowance on Credit Losses for Investments, Loans and Leases, and Off-balance Sheet Credit Exposures.
The addendum should be used in conjunction with the Other Supervisory Committee Audit, Minimum Procedures Guide. Together, these documents provide the minimum procedures to perform when a supervisory committee chooses the Other Supervisory Committee Audit option for completing its annual audit requirement under NCUA regulation § 715.7, Supervisory Committee audit alternatives to a financial statement audit. These procedures are designed to assist the supervisory committee, internal auditor, or other qualified person in completing the areas of review outlined in NCUA regulation part 715, Appendix A, Supervisory Committee Audit—Minimum Procedures.