4 Things Our Credit Union Auditors Have Learned From the Covid-19 Pandemic
At this time last year, 2020, we were at the very beginning of the pandemic quarantine period, and we had no idea what the upcoming months had for us. Every Credit Union has felt a significant impact from the pandemic, and as consulting CPAs for credit unions, we also have experienced these pain points with our Credit Union partners.
These experiences have highlighted to our clients some of the services that have helped them navigate rough waters and, also, how to emerge from a crisis ready and prepared for the upcoming growth.
For our accounting team working with credit unions, the pandemic has solidified beyond doubt that these four aspects of a strong business relationship can help navigate the rough waters.
(1) Excellent Communications Between Management & Supervisory Committee is Critical
Excellent communication between the management of the credit union and the Supervisory Committee is and always has been critical for success, but what the pandemic has taught us is the relationship between these two is really one of the foundational elements for the financial institution to survive and to thrive.
In the middle of a credit union Supervisory Committee and its management is the auditor.
The auditor must know how to report to the Supervisory Committee while respecting management’s role of leading the credit union.
When the auditor can tailor the communications to respect the roles of both the board and the CEO and the CFO, it supports an environment of trust and respect. The management can build on that for the entire organization, and that is valuable to the Credit Union.
Furthermore, our role of assisting Supervisory Committees with meetings, work plans, report review and follow up action plans was a huge benefit this past year.
(2) Must Stay Hyper Current on Risks Impacting Credit Unions
Of course, it has always been a vital element in the auditor role to keep current on risk management, but this last year has taught us just how critical current events can impact every aspect of running a financial institution.
The auditor’s role is in identifying emerging risks early on and participating in the decision-making to reduce the threats those risks impose.
It is impossible to predict global crises such as the COVID-19 pandemic, but the auditor can make it a habit of constantly reviewing NCUA and other regulatory changes and hot topics. Then use that knowledge to quickly and proactively advise and guide.
We have worked on enough bond claims for Credit Unions that were not previously our clients to know the potential damages.
(3) A Quarterly Work Plan is Crucial
As our auditors work hard to stay very aware of current risks to our financial institution partners, we incorporate that knowledge into the quarterly work plans to address those identified risks and any current regulatory hot topics.
In the credit union’s quarterly plan, we also want to make sure that we will test that internal controls are in place and being followed.
The quarterly work plan is a great tool to help us regularly gauge progress and make modifications. It creates a consistent cycle of analysis, communication and adjustment.
The work plan is not a one size fits all and can be tailored to meet the needs of each Credit Union.
(4) The Importance of the Auditor as Trusted Business Advisor
Our strongest credit union clients are facing 2021 with a solid relationship with their auditor.
When the auditor is embraced as a trusted business advisor to the Supervisory Committee, it becomes a collaborative atmosphere. Beyond attending Supervisory Committee meetings, the auditor can develop a role of guiding the Committee throughout the year.
With a strong consultative relationship, the auditor can review the internal audit procedure results with the Committee, and they can establish a plan of action together.
While those audit results hold the management and the Board of Directors accountable, they also help safeguard the assets of the credit union and its members.