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§ 40.1300. Preparation of Independent Audit Report.


Barclays Official California Code of Regulations Currentness
Title 10. Investment
Chapter 1. Commissioner of Business Oversight, Division of Financial Institutions
Subchapter 40. Industrial Loans
Article 13. Reports
10 CCR § 40.1300
§ 40.1300. Preparation of Independent Audit Report.
An industrial loan company shall furnish an independent audit report pursuant to the following:
(a) Each industrial loan company shall annually, on or before the fifteenth day of March, file with the Commissioner a two part report: One, containing statistical information, to be prepared by the company on Form ILL 424, Instructions for Completion of Report of Statistical Information of Industrial Loan Companies (dated 1/88); the other, as described in subsection (d), prepared by an independent certified public accountant or an independent public accountant.
(b) Three copies of the report must be filed with the Commissioner of the Department of Business Oversight.
(c) For the purpose of determining whether an accountant is independent, as required by Financial Code Section 18405, the rules and regulations of the California State Board of Accountancy with respect to independence shall be applicable. The accountant shall include in the report an affirmative statement that he/she is independent and has no financial interest in the industrial loan company either directly or indirectly.
(d) The second part of the annual report shall contain:
(1) Audited financial statements which include a comparative balance sheet of the company as of the last day of the calendar year and of the preceding year, and comparative statements of income; stockholder's equity and changes in financial position for each such calendar y ear. These financial statements shall be prepared on an accrual basis accompanied by an accountant's report, including an opinion meeting the standards of the California Board of Accountancy (Rule 58.1 of the Board of Accountancy).
(2) An analysis of the allowance for loan losses, showing the balance at the beginning of the year, additions to the allowance less accounts charged to the allowance, and the balance at the end of the year.
(3) The accountant shall submit under separate cover, along with the audit report, a copy of the letter to management describing internal control and making recommendations for improving operating procedures. The company shall submit a copy of its letter, if any, in response to the management letter of the accountant. The accountant shall examine documentation on loans and include in the management letter appropriate comments on the condition of the loan files examined if any weaknesses exist (e.g., application, notes, security interest, insurance, appraisals).
Note: Authority cited: Section 18347, Financial Code. Reference: Sections 321, 18029, 18405, 18409, 18410 and 18411, Financial Code.
1. Change without regulatory effect adding new article 13 (sections 40.1300-40.1304) and renumbering and amending former section 1247 to new section 40.1300 filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).
2. Change without regulatory effect amending subsection (b) and Note filed 8-21-2019 pursuant to section 100, title 1, California Code of Regulations (Register 2019, No. 34).
This database is current through 7/29/22 Register 2022, No. 30
10 CCR § 40.1300, 10 CA ADC § 40.1300
End of Document