N.J. Admin. Code § 3:7-3.7

Current through Register Vol. 56, No. 23, December 2, 2024

Section 3:7-3.7 - Review of internal controls and audit program

(a) The public accountant or other approved person shall perform the minimum audit program outlined below unless the scope of the internal auditor's program encompasses said minimum audit program and the internal auditor has complied with the program. The public accountant or approved person shall make such documentation tests of the internal audit program as he or she deems necessary to determine that it encompasses the minimum audit program and that the internal auditor has complied with the program.

(b) The public accountant or other approved person shall indicate in his or her report the portions of the minimum audit program wherein deficiencies were noted and action taken to satisfy minimum standards.

(c) In addition, the public accountant or other approved person shall review the scope, frequency of performance and testing done under the internal audit program of the bank to determine if they are considered adequate for the institution under examination. If the internal audit program is deemed inadequate, he or she shall make suggestions for expansion and shall indicate in his or her report any conditions disclosed in the review which are deemed to reflect a material weakness in internal controls and offer any suggestions believed to strengthen them.

(d) The public accountant or other person shall determine the extent of confirmations that in his or her judgment are necessary pursuant to 3:7-3.3 to achieve a satisfactory confirmation level. The report shall clearly disclose the number and dollar amount and percent of accounts confirmed. The report shall also disclose the type of confirmation used (that is, positive or negative) and the basis used to select accounts for confirmation. If statistical sampling is used as the basis for selecting accounts, the report must also disclose the method used and the confidence level achieved.

(e) If the internal auditor has been granted permission to perform the confirmation program, the public accountant or other approved person shall annually review the program and results to determine that the requirements in (d) above have been satisfactorily met and shall so note in his or her report. If the confirmation program performed by the internal auditor is deemed to be insufficient, it shall be the responsibility of the public accountant or other approved person to perform additional confirmations to satisfy the provisions of (d) above.

N.J. Admin. Code § 3:7-3.7

Amended by R.1985 d.485, effective 9/16/1985.
See: 17 N.J.R. 1702(a), 17 N.J.R. 2247(a).
(d)-(e) added.
Amended by R.2000 d.481, effective 12/4/2000.
See: 32 N.J.R. 3385(a), 32 N.J.R. 4253(a).
In (c), inserted a reference to State associations; in (d), inserted a reference to other persons; and in (e), inserted references to other approved persons throughout.
Amended by R.2008 d.331, effective 11/3/2008.
See: 40 N.J.R. 3775(a), 40 N.J.R. 6437(a).
In (c), deleted "or State association" following "bank".