Comments Requested on Proposed Advisory on the Limitation of Liability Provisions in Audit Engagement Letters
May 13, 2005
Circular No. 11707

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

The Federal Financial Institutions Examination Council—on behalf of the Office of Thrift Supervision, Treasury; the Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation; the National Credit Union Administration; and the Office of the Comptroller of the Currency, Treasury—is seeking comment on the proposed interagency advisory on the unsafe and unsound use of limitation of liability provisions and certain alternative dispute resolution provisions in external audit engagement letters.

The proposal advises financial institutions’ boards of directors, audit committees and management that they should ensure that they do not enter any agreement that contains external audit or limitation of liability provisions with respect to financial statement audits.

Comments are requested by June 9, 2005.

Details on how to file comments are in the proposed interagency advisory.

FFIEC press release OFFSITE 
Proposed interagency advisory OFFSITE PDF 

Ronald Stroz
Examining Officer
Operational Risk Department

William L. Rutledge
Executive Vice President