76K.— (1) The board of a credit union shall appoint a person (in this Act referred to as the "internal audit function")—

(a) to provide for independent internal oversight, and

(b) to evaluate and improve the effectiveness,

of the credit union’s risk management, internal controls and governance processes.

(2) The internal audit function shall prepare, implement and maintain a document (in this Act referred to as the "internal audit charter") F224[which shall define]—

(a) the activities of the internal audit function within the credit union, and

(b) the scope of those activities,

and, relevant to the performance of its audits, shall authorise the access by the internal audit function to records, personnel and physical properties of the credit union. The internal audit charter shall be reviewed and modified in accordance with section 55(8).

(3) There shall be prepared by the internal audit function and approved by the board of a credit union or, where an audit committee exists for the credit union, by the audit committee with the agreement of that board, a written plan (in this Act referred to as an "internal audit plan") detailing the scope and objectives of audits, setting priorities as regards areas to be audited and determine the necessary resources required to implement the plan. The internal audit plan shall be reviewed and modified in accordance with section 55(8).

(4) The internal audit function shall be separate from other functions and activities of the credit union, and be capable of operating independently of management and without undue influence over its activities.

(5) The internal audit function shall report the results of its evaluations and recommendations to the audit committee, where one exists, or otherwise to the board of directors, on a regular basis, and at least quarterly.

(6) (a) The Bank may prescribe the form and content of the internal audit charter and internal audit plan, and related matters.

(b) Without prejudice to the generality of paragraph (a), regulations may prescribe—

(i) the frequency and timing at which an examination of the records of the credit union is to be undertaken by the internal audit function, and

(ii) the nature of the records to be inspected for the purposes of subparagraph (i).

(7) The internal audit function shall have access, at all times, to the books and documents (including draft documents) of the credit union to enable it to carry out its functions under the Act.]