Navy Federal Credit Union 2006 Annual Report Download - page 19

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To the Board of Directors, Supervisory Committee and Other Members of Navy Federal Credit Union:
We have audited the accompanying consolidated statements of financial condition of Navy Federal Credit Union as of
December 31, 2006 and 2005, and the related consolidated statements of operations, of changes in reserves and undivided
earnings, and of cash flows for the years then ended. ese financial statements are the responsibility of the credit union’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. ose
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
e industry audit guide for depository and lending institutions issued by the American Institute of Certified Public
Accountants indicates that members’ accounts are liabilities. As further described in Note 1, Navy Federal Credit Union
considers members’ accounts to be members’ equity and has presented as such. e presentation followed by Navy Federal
Credit Union has no effect on the total amount or classifications of assets or on the determination of income, expenses or
net income.
In our opinion, except for the classification of members’ accounts as described in the third paragraph of this report, the
consolidated financial statements referred to above present fairly, in all material respects, the financial position of Navy
Federal Credit Union at December 31, 2006 and 2005, and the results of its operations and its cash flows for the years
then ended in conformity with accounting principles generally accepted in the United States of America.
March 5, 2007
The Report of
Independent Auditors