Audit and Accounting Guide - Depository and Lending Institutions

Chapter 21 Trust and Asset Management Activities

Gray shaded text in this chapter reflects guidance issued but not yet effective as of the date of this guide, July 1, 2018, but becoming effective on or prior to December 31, 2018, exclusive of any option to early adopt ahead of the mandatory effective date. Unless otherwise indicated, all unshaded text reflects guidance that was already effective as of the date of this guide.

Introduction

21.01 Among other engagements, auditors may be engaged to (a) report on trust company financial statements, particularly of common or collective funds, (b) report on internal control over financial reporting in the institution's trust department, or (c) perform procedures agreed to by management or regulators or extended audit services to supplement the institution’s internal audit efforts.^1,2,3

21.02 Trust and asset management activities include fiduciary services provided to customers. One type of fiduciary service involves acting as a trustee. Trust activities of an institution may be an integral part of the institution's services; however, because of strict laws⁴ governing fiduciary responsibilities, institutions conduct trust activities independently through

a.     a separate department or division of the institution;

b.     a separately chartered trust company; and

c.     a contractual arrangement with the trust department or a trust company of another depository institution.

21.03 The organizational structures of institutions' trust ...