Connecticut General Statutes 36a-86 – Audit by accountants; governing board liability. Subsidiaries of holding companies; consolidated reports
(a) The governing board of each Connecticut bank shall annually procure an audit or examination by certified public accountants or holders of certificates of authority as public accountants selected by vote of the governing board or a duly authorized committee thereof, and such accountants shall agree to provide related working papers, policies and procedures to the commissioner, if requested. The accountants shall thoroughly examine the books, records, accounts and affairs of such bank and submit a signed report of the audit or examination showing the condition of the bank to the governing board of such bank within a reasonable period of time following the conclusion of the audit or examination. The signed report shall be kept on file in such bank and such governing board shall file the following documents with the commissioner not later than the earlier of (1) one hundred twenty days following the close of such bank’s fiscal year, or (2) the date prescribed by federal law for such bank to file such audit or examination with the applicable federal banking regulator, unless the commissioner extends such deadline for good cause shown: (A) A copy of the signed report; (B) any written communication regarding matters that the accountants are required to communicate to the audit committee of the bank; and (C) any written communication from the accountants to the governing board noting significant deficiencies and material weaknesses in internal controls of the bank. Members of the governing board of such Connecticut bank shall not be personally liable for any loss suffered by such bank through the wrongdoing or negligence of any officer or employee, which wrongdoing or negligence should have been discovered by the accountants in the performance of their duties, provided such members shall have exercised due care to procure thorough and substantial audits by the accountants.
Terms Used In Connecticut General Statutes 36a-86
- Bank: means a Connecticut bank or a federal bank. See Connecticut General Statutes 36a-2
- Commissioner: means the Banking Commissioner and, with respect to any function of the commissioner, includes any person authorized or designated by the commissioner to carry out that function. See Connecticut General Statutes 36a-2
- Company: means any corporation, joint stock company, trust, association, partnership, limited partnership, unincorporated organization, limited liability company or similar organization, but does not include (A) any corporation the majority of the shares of which are owned by the United States or by any state, or (B) any trust which by its terms shall terminate within twenty-five years or not later than twenty-one years and ten months after the death of beneficiaries living on the effective date of the trust. See Connecticut General Statutes 36a-2
- Connecticut bank: means a bank and trust company, savings bank or savings and loan association chartered or organized under the laws of this state. See Connecticut General Statutes 36a-2
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Governing board: means the group of persons vested with the management of the affairs of a financial institution irrespective of the name by which such group is designated. See Connecticut General Statutes 36a-2
- Holding company: means a bank holding company or a savings and loan holding company, except, as used in sections 36a-180 to 36a-191, inclusive, "holding company" means a company that controls a bank. See Connecticut General Statutes 36a-2
- Subsidiary: has the meaning given to that term in 12 USC Section 1841(d), as amended from time to time. See Connecticut General Statutes 36a-2
(b) Notwithstanding the provisions of subsection (a) of this section, the governing board of a Connecticut bank that is a subsidiary of a holding company may procure and file annually with the commissioner a signed consolidated report of the audit or examination of the holding company in lieu of that of the Connecticut bank, provided (1) prior to the engagement of an accountant, the governing board of such Connecticut bank has voted to allow and accept as adequate, a consolidated report of the audit or examination of the holding company; (2) the accountants selected to provide such consolidated report have agreed to provide related working papers, policies and procedures to the commissioner, if requested; (3) the accountants shall thoroughly examine the books, records, accounts and affairs of the Connecticut bank and shall submit a signed consolidated report to the governing board of such Connecticut bank within a reasonable period of time following the conclusion of the audit or examination; and (4) the signed consolidated report shall be kept on file in such Connecticut bank and a copy shall be filed with the commissioner. If the commissioner determines that good cause exists, the commissioner may require the governing board of a Connecticut bank that is a subsidiary of a holding company to file an audit or examination of the bank in accordance with the provisions of subsection (a) of this section in lieu of a consolidated report.