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 final rules governing their authority to take disciplinary actions against independent public accountants and accounting firms that perform audit and attestation services required by section 36 of the Federal Deposit Insurance Act.
The final rules establish procedures under which the agencies can, 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. The rules permit immediate suspensions in limited circumstances.
The rules also provide that certain violations of law, negligent conduct, reckless violations of professional standards or lack of qualifications to perform auditing services may be considered good cause to remove, suspend or bar an accountant or firm from providing services for banking organizations subject to section 36.
The final rules will become effective October 1, 2003 and amend each agency’s rules of practice separately, but are substantively identical.
The joint agency notice is attached.
Questions on this matter may be directed, at this Bank, to James Hennessy, Vice President, Bank Applications and Analysis Department.