Financial Literacy: Understanding Financial Statements ...

NACUSAC 2016 Annual Conference

Philadelphia, PA

Financial Literacy: Understanding Financial Statements & Key Ratios

June 16, 2016 10:30am ? 12:10pm and 1:20pm ? 3:00pm

Presented by:

Joseph A. Zito, CPA, MBA

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Michigan Texas Florida

Insight. Oversight. Foresight. SM

Learning Objectives

Financial Institutions Group

? Meet the NCUA financial literacy requirements for credit union officials

? Improve your understanding of the credit union's performance in comparison to expected benchmarks

? Obtain resources available to help you develop expectations and to assist in the monitoring of the credit union's performance to those expectations

? Understanding why financial trends occur (positive and negative) in order to assist in asking the appropriate questions of management

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NCUA Financial Literacy Requirements

Financial Institutions Group

? NCUA Letter to Federal Credit Unions 11-FCU-02, February 2011

? Clarifies Final Rule 701.4, General Authorities and Duties of Federal Credit Union Directors

? Focuses on financial skills requirement

? New directors must acquire training within six months of election or appointment

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Six Key Provisions

Financial Institutions Group

? Director responsibilities include:

? Responsible for credit union's general direction ? Carry out duties with good faith and due care ? Administer affairs fairly and impartially ? Ability to read and understand financial statements and ask

appropriate questions ? Follow laws and sound business practices ? May rely on work of competent staff and consultants

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Board/Management Responsibilities for Financial Reporting

Financial Institutions Group

NCUA Regulation, Part 741.6

? Ensure financial statements are prepared in accordance with generally accepted accounting principles (GAAP).

? Ensure accounting records/financial reports are prepared timely and accurately.

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