Interagency Proposal for Rules Governing Disciplinary Actions Against Independent Public Accountants and Accounting Firms
December 23, 2002
Circular No. 11485

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a joint press release, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision have issued an interagency proposal for rules governing disciplinary actions against independent public accountants and accounting firms.

The proposed rules would establish procedures under which the agencies could, for good cause, remove, suspend, or bar an accountant or firm from performing audit and attestation services for insured depository institutions with assets of $500 million or more. They would permit immediate suspensions in limited circumstances.

Under the proposed rules, violations of law, certain negligent conduct, reckless violations of professional standards or lack of qualifications to perform auditing services would be considered good cause to remove, suspend or bar an accountant or firm from providing services for such an insured institution.

Comments from the public on the proposed rule are due March 10, 2003.

The joint agency notice is attached.

Questions on this matter may be directed, at this Bank, to F. Christopher Calabia, Bank Supervision Officer, Policy and Analysis Function.