3 CRR-NY 5.4NY-CRR
3 CRR-NY 5.4
3 CRR-NY 5.4
5.4 Internal audits.
(a) The superintendent encourages all foreign bank offices to employ qualified internal auditors as an important aspect of adequate internal control. The superintendent may, in his or her discretion, require a foreign bank office to follow requirements similar to those set forth in paragraph (b) of this section.
(1) Internal auditors, whether head office, resident or regional, are expected to be well-qualified to perform their duties. Qualified internal auditors should possess significant experience in bank accounting, auditing and control functions, and attend relevant professional education courses on an annual basis.
(b) Foreign bank offices with a composite ROC-A rating of four or worse, and an “O” rating of four or worse, and, on a case-by-case basis as determined by the superintendent, foreign bank offices with an “O” rating of three or worse, regardless of the composite rating, must have comprehensive on-site internal audits performed annually by either the foreign banking corporation's head office internal auditors or foreign bank office resident or regional internal auditors who report directly to the head office.
(1) A “comprehensive internal audit” shall include the performance of annual detailed internal audit procedures on all high risk areas which represent significant potential exposure to the foreign bank office. The designation of high risk areas will require the internal auditor's judgment, and will be reviewed during examinations of the office.
(2) Foreign bank office resident or regional internal auditors should be hired with the approval of the foreign banking corporation's head office and be authorized to communicate directly with the head office without any foreign bank office management intervention. The superintendent requires such resident or regional internal auditors to remain independent of foreign bank office management.
(c) The superintendent may, in his or her discretion, require foreign bank offices subject to subdivision (b) of this section to have the comprehensive on-site internal audits performed annually by part-time or full-time regional or resident internal auditors who report directly to head office. The superintendent shall decide whether the internal auditors shall be part-time or full-time, taking into consideration the size and activities of the foreign bank office. Any such internal audit shall follow the requirements described in subdivision (b) of this section. In addition, at the time of each onsite examination, the foreign bank office shall present to the examiner in charge the formal qualifications of the internal auditors and the internal auditors' actual work plan since the previous examination and the internal auditors' program for the next 12 month period.
(d) Reports of internal auditors required under this Part together with supporting workpapers must be in English. Workpapers shall be made available to the superintendent upon request.
3 CRR-NY 5.4
Current through January 31, 2023
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IMPORTANT NOTE REGARDING CONTENT CURRENCY: JULY 31, 2023, is the date of the most recently produced official NYCRR supplement covering this rule section. For later updates to this section, if any, please: consult editions of the NYS Register published after this date; or contact the NYS Department of State Division of Admisnistrative Rules at [email protected]. See Help for additional information on the currency of this unofficial version of the NYS Rules.