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National Credit Union Administration’s Directive Is Driven by Desire to Reduce Risk of Report Manipulation by Management

NEW YORK (August 14, 2017) – The American Institute of CPAs supports the National Credit Union Administration’s focus on the overall integrity of audit report submissions, and recently worked with the regulatory body to remove obstacles to the implementation of a new policy designed to reduce the risk of manipulation or fraud by credit union management.

NCUA regulates or insures almost 5,800 federally insured credit unions. The policy change on external auditor reports was designed to reduce the risk of manipulation by management after some issues emerged in the agency’s periodic material loss reviews. The new requirement initially caused concern among some CPA firms, however, because the act of forwarding the audit report directly to the agency is considered a management function, which could impair an external auditor’s independence. At the AICPA’s request, the NCUA agreed to accept an online delivery option for the documents.

“The policy change was designed to preserve the integrity of the auditor’s report, but inadvertently raised issues for external auditors,” said Sydney Garmong, a partner with Crowe Horwath LLP and chair of the American Institute of CPAs’ Depository Institutions Expert Panel, which addresses professional practice issues regarding financial institutions. “We’re grateful that the NCUA heard our concerns and agreed to acceptable alternatives to preserve auditor independence.”

In an update to credit union management and boards in May, the NCUA said the external auditor could either forward its audit report directly to the regulator, provide time for physical inspection of the document at a specified time or place, or use “a secure portal that verifies and validates the original document source and ensures the audit report submitted to NCUA is authentic and unaltered.” An online platform jointly developed by CPA.com – the technology arm of the AICPA – and Confirmation.com, RIVIO Clearinghouse, meets the latter criteria and is already in use for NCUA submissions.

RIVIO ensures private companies and authorized third parties can share audit reports and other relevant records from validated CPA firms. Company management, in this case credit union directors, can designate who views the audit reports uploaded by CPA firms, but cannot alter the financial presentation in any way. And because the clearinghouse ensures that management is solely responsible for authorizing access to data, it defuses questions about the auditor’s independence.

CPA firms that specialize in serving credit union clients are already making use of the platform.

“We have used RIVIO for all the NCUA requests received. It’s a very efficient way for us to follow the updated policy,” said Chris Vallez, CPA, of Nearman, Maynard, Vallez, a Miami-based CPA firm.

Erik Asgeirsson, president and CEO of CPA.com, said: “The RIVIO Clearinghouse was developed to address the exact type of potential fraud or financial manipulation identified by the NCUA.” Brian Fox, president of Confirmaton.com, added: “Going forward, RIVIO will provide the NCUA the peace of mind that it is getting an unaltered audit report from a verified CPA firm, while still ensuring independence for CPA firms.”

About CPA.com

CPA.com offers a growing list of products and services for practice management, client advisory services and professional development. The company has established itself as a thought leader on cloud technology and has been a driving force around the reemergence of virtual CFO/controller services by firms. The RIVIO Clearinghouse, a joint venture between CPA.com and Confirmation.com, is an online financial document clearinghouse that enables private businesses to exchange key financial information with lenders and investors.

CPA.com is a subsidiary of the American Institute of CPAs, the world’s largest member body representing the CPA profession. For more information, visit CPA.com.

About the American Institute of CPAs

The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 418,000 members in 143 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at www.aicpa.org/press.

About the Association of International Certified Professional Accountants

The Association of International Certified Professional Accountants (the Association) is the most influential body of professional accountants, combining the strengths of the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA) to power opportunity, trust and prosperity for people, businesses and economies worldwide. It represents 650,000 members and students in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMAs and accounting and finance professionals globally.

The Association of International Certified Professional Accountants and CPA.com, the American Institute of CPAs' technology subsidiary, are launching an initiative to provide funding and support to early-stagecompanies developing innovative technologies for the accounting profession. The Association and CPA.com Startup Accelerator will seek to support as many as five early-stage companies during the next year. The focus will be on startups in two key areas:

• Technology and financial information, which could include advances in artificial intelligence, automation of routine tasks, and the application of blockchain/digital ledgers; and
• Professional competency innovation, which could encompass machine learning to personalize professional education, collaboration tools for mentors and experts, and improvements in measuring professional competency, among other categories.

The Startup Accelerator will provide as many as five companies with up to $20,000 in funding and access to subject-matter experts, including an advisory panel of thought leaders in the accounting technology field available to provide coaching and mentoring on issues and opportunities unique to the profession. The funding will be subject to a commercial agreement that could take any number of forms, including using the funding to purchase equity in the startup or to assist with development of a product in which CPA.com and/or the Association would own part of the product's intellectual property. Another possibility would be a channel agreement to provide access to the market.

Firms chosen for the accelerator initiative also would have the opportunity to showcase their product or service next June at AICPA ENGAGE 2018, one of the largest accounting-related events in the United States, and—with continued, successful development—the potential for longer-term, strategic relationships within the profession.

The main goals for the Association and CPA.com in launching the accelerator are to promote innovation and to give the accounting profession early insight into disruptive technologies and services in finance and business.

Applicants from all global markets are eligible to apply for one of the five accelerator spots. To qualify:

• Startups should be at a pre-Series A stage of financing, with some exceptions.
• The company must have a functioning product or service.
• Pre-revenue companies will be considered based on their development progress and business plan.
• Candidate companies must agree to pitch their product or service to Association and CPA.com executives this fall, after which up to five finalists will be selected.

Submissions by startups are due by Oct. 5. Interested companies that want more information can contact Greg LaFollette, a strategic adviser with CPA.com, at Greg.Lafollette@hq.cpa.com, or Mark Brooks, senior manager of innovation at the Association, at Mark.Brooks@aicpa-cima.com. To apply for consideration or learn more details about the Startup Accelerator, visit aicpaglobal.com/accelerator.

A new book shares the insights of 11 thought leaders in accounting and business advising to provide practical strategies for helping firms make technology decisions that will propel their growth in today’s environment.

Just in time for summer reading, the paperback book, Tech Roadmap: Selecting the Ideal Solutions to Thrive in Business Advising, is an easy way to plan for technology expansion within an accounting or business advisory firm. It includes real-world advice from leading experts on preparing firms to navigate technology choices, determining which technologies are best suited for the challenges facing firms and ensuring the solutions work for a firm.

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• The Groundwork – What needs to happen at a firm before it begins vetting specific technology?
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