Haw. Code R. § 16-26-4 - Purpose of examination
(a) Disclosure of
any information related to an examination of an institution is prohibited by
statute, but public knowledge of the examination process should promote
confidence in the integrity of the financial system and in individual
institutions.
(b) The examination
of a depository institution is designed to determine the financial condition of
the institution, to evaluate the safety and soundness of its operations, to
evaluate its management, and to determine compliance with applicable laws and
rules. It is aimed at early detection of adverse trends and problems, so as to
allow time for remedial action to be taken to correct unsafe and unsound
practices or violations of laws and rules.
(c) The examination provides the commissioner
with an understanding of the nature, relative seriousness, and ultimate cause
of an institution's problems and provides the factual foundation on which to
order corrective actions or measures. The examination, therefore, plays a key
role in the supervisory and enforcement process.
(d) The examination of a depository
institution does not serve the function of an audit. The examiner performs an
evaluation function, rating capital adequacy, asset quality, management,
earnings, liquidity, and sensitivity to market risk. The examiner accepts and
relies on an institution's records and on statements and information provided
by its employees, officers, and directors, and does not independently verify
matters disclosed on an institution's books and records.
(e) The examination is not undertaken for the
detection of fraud, nor is its sole or primary purpose to assure the complete
correctness or appropriateness of records. Nevertheless, where deemed
appropriate, in those cases where the examiner in charge perceives the need,
the examination branch chief may make the determination to expand the scope of
an examination to include the use of certain audit techniques and procedures
and shall notify the deputy commissioner in writing of the expansion of the
examination scope.
Notes
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