Professional Documents
Culture Documents
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Presentation Agenda
• Auditing standards in credit cooperatives
• Earnings distribution
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Who is WOCCU
• Represents >120 million credit union members in
85 countries worldwide.
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Auditing standards
• Traditional Supervisory Committees in credit
cooperatives
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Role of the External/Internal Audit
•
Committee
Perform or preferably, appoint an external professional auditor
to review records within 90 days of close of fiscal year
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External/Internal Audits should
include
• Evaluation of assets, liabilities & capital
• Verification of cash balances, securities and all
member accounts
• Examination of delinquent loans
• Loan loss provisioning
• Loans to officials & loan documentation
• Accounting treatment used
• General ledger & subsidiary ledger balancing
• Compliance with laws, regulations & bylaws
• Review of suspicious activity
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Prudential Auditing - Supervision
Range of Preferences:
- Direct Supervision of all credit coops by government
financial sector regulator– UK, Australia, US, most
english-speaking Canada, Ireland, Costa Rica,
Colombia
- Direct Supervision of the large ones – Ecuador,
Bolivia, Chile and Uruguay
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Earnings Distribution
• The first priority is capitalization to a level required by
regulation and based on business needs
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Earnings Distribution
• Only after the organization is adequately
capitalized should it consider an
ownership share dividend
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What is needed for strong
credit coop legislation
• Specific law for financial cooperatives
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Core Principals for Legal Framework
= OUTREACH
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Legislative Tools
• Model Law for Credit Unions – model
legislation for credit cooperatives
Dave Grace
World Council of Credit Unions
dgrace@woccu.org
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