1. Each covered institution shall annually obtain an external audit conducted by an independent certified public accountant that includes, without limitation, an audit of financial statements and the preparation of a formal report of the audit.
2. The report of the audit must include, without limitation:
(a) Annual financial statements, including, without limitation:
(1) A balance sheet;
(2) A statement of operations and cash flows, or income statement; and
(3) Notes and supplemental schedules prepared in accordance with generally accepted accounting principles.
(b) An expression of opinion by the independent certified public accountant as to whether the financial statements are presented fairly, in all material aspects, in accordance with the applicable financial reporting framework.
(c) An assessment of the internal control structure of the covered institution, including, without limitation, an evaluation of the adequacy of the internal control structure.
(d) A computation of tangible net worth. For the purposes of this paragraph, tangible net worth is calculated by subtracting all of the following from total equity:
(1) Receivables due from related entities;
(2) Goodwill and other intangibles; and
(3) Pledged assets.
(e) A validation of the valuation and reserve methodology of mortgage servicing rights, as applicable.
(f) Verification of adequate fidelity and errors and omissions insurance.
(g) Testing of controls related to risk management activities, including, without limitation, compliance and stress testing, as applicable.
3. The report of the audit must be made available to the Commissioner upon request.