12 CFR 653.4 – Internal controls
(a) The Corporation‘s board of directors must adopt an internal controls policy that provides adequate directions for, and identifies expectations in, establishing effective safety and soundness control over, and accountability for, the Corporation’s operations, programs, and resources.
Terms Used In 12 CFR 653.4
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
(b) The internal controls system must address:
(1) The efficiency and effectiveness of the Corporation’s activities;
(2) Safeguarding the assets of the Corporation;
(3) Evaluating the reliability, completeness, and timely reporting of financial and management information;
(4) Compliance with applicable laws, regulations, regulatory directives, and the policies of the Corporation’s board of directors and senior management;
(5) The appropriate segregation of duties among the Corporation personnel so that personnel are not assigned conflicting responsibilities; and
(6) The completeness and quality of information provided to the Corporation’s board of directors.
(c) The Corporation is responsible for establishing and implementing an effective system to identify internal controls weaknesses and taking action to correct detected weaknesses. The Corporation must document:
(1) The process used to identify weaknesses,
(2) Any found weaknesses, and
(3) How identified weaknesses were addressed.