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Credit Union and co-operation with Overseas Regulators Act 2012

Section 76 K Internal Audit (1)

The board of a credit union shall appoint a person (in this Act referred to as the “internal audit function”) –

  • to provide for independent internal oversight, and
  • to evaluate and improve the effectiveness.

What is Internal Audit

Internal audit is an ‘independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. Internal audit brings a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.’

Assurance is an objective examination of evidence to provide an independent assessment on risk management, control and governance processes.


  • Financial reviews
  • Compliance reviews

Consulting is advisory in nature and performed at the request of the Credit Union

Internal Audit Review

Some of the reviews offered by internal audit are;

Governance – Internal audit can assist your Credit Union in ascertaining if the current level of governance oversight in place is in line with the new Act and up-to-date Regulatory guidance.

Practical recommendations are provided to improve areas of weakness.

Operational risk – Internal audit can examine the everyday operational activities of your Credit Union. This results in internal audit ascertaining if there are any instances where these observed operations differ from documented policies, procedures and legislative requirements and determine the risks associated with these instances.

Gap analysis – A key aspect to the reviews offered by FMB’s outsourced internal audit function will be to conduct gap analysis reviews of the Credit Union Act. A gap analysis review compares the requirements of the Credit Union Act to the current state of operations within your Credit Union. This type of review results in highlighting areas of corporate governance where extra effort may be required by your Credit Union in order to satisfy the requirement of adhering to the Credit Union Act 2012. FMB Chartered Accountants can also complement the gap analysis review by incorporating up-to-date Regulatory guidance together with what is considered ‘best practice’.

This ensures a comprehensive review is provided to your Credit Union.

Flexibility – Internal audit has the flexibility to engage in non standard reviews should your Credit Union require extra assurance. Examples of these could be; Data Protection and Anti Money Laundering reviews, amongst others.

The Role of Internal Audit

The role of an outsourced Internal Audit function is to provide the Board/Audit Committee of your Credit Union with an independent, objective opinion on the adequacy and effectiveness of the current control framework. In order to achieve this, FMB prepares tailored internal audit strategies in response to the risks facing your Credit Union. Such risks could potentially arise due to a change in legislation, the development and implementation of a new system and/or policies and procedures, etc.

Why FMB?

Since its inception, FMB has undertaken external audits for Credit Unions. FMB currently acts as external auditor to numerous industrial and community Credit Unions, the majority of these are located in Co. Dublin. Our Credit Union client assets are in excess of €700m and range in size from approximately €1.7m to €165m.

The majority of our Credit Union external audit clients have been with our firm for many years, which is an indication of the excellent level of service we provide.

We understand the sector characteristics very well and are in constant contact with our Credit Union clients on a year round basis, whether it is advising on audit, accounting or regulatory matters.

We have carried out loan book, policy and asset reviews under requests from our Credit Union external audit clients and the Central Bank. Through our outsourced internal audit function,

FMB will make a real difference to your Credit Union by:

  • Bringing a wide range of internal audit experience through having conducted numerous reviews of both public and private sector organisations;
  • Supporting continuous improvement in governance, risk management and control processes;
  • Providing alignment with the Credit Union Act, changes in the Regulatory framework and ‘best practice’;
  • Being business advisor’s working with management and the board focused on adding value;
  • Investing in quality and dedicated employees; and
  • Being a cost effective, high value provider of services.

Further information

FMB would be delighted to clarify any queries you may have on our outsourced internal audit service. We would welcome the opportunity to meet with you to discuss the matter further.

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