Requests for Comment Regarding Removal, Suspension, and Debarment of Accountants From Performing Audit

Federal Reserve Bankll★Kof DallasDALLAS, TEXAS 75265-5906January 24, 2003Notice 03-01TO: The Chief Executive Officer of eachfinancial institution and others concernedin the Eleventh Federal Reserve DistrictSUBJECTRequests for Comment Regarding Removal,Suspension, and Debarment of Accountants FromPerforming Audit ServicesDETAILSThe Board of Governors, the Office of the Comptroller of the Currency, the FederalDeposit Insurance Corporation, and the Office of Thrift Supervision have requested comment ona proposal to revise their respective rules of practice pursuant to Section 36 of the FederalDeposit Insurance Act (FDIA) (12 U.S.C. 1831m).Congress gave the agencies authority to remove, suspend, or debar accountants fromperforming the audit services required by Section 36 if there is good cause to do so. Thisproposal would amend the agencies’ rules to establish rules of practice and procedure for theremoval, suspension, and debarment of accountants and their firms from performing Section 36audit services for insured depository institutions. The proposal reflects the agencies’ increasingconcern with the quality of audits and internal controls for financial reporting at insureddepository institutions.Although there have been few bank and thrift failures in recent years, the circum-stances of the failures that have occurred illustrate the importance of maintaining high quality inthe audits of the financial position and attestations of management ...