Federal Deposit Insurance Corporation
550 17th Street NW, Washington, DC 20429 Division of Supervision
External Auditing Programs
FIL-16-98
February 18, 1998
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Proposed FFIEC Policy Statement on External Auditing Programs of Banks and Savings
Associations
The four federal banking agencies, under the auspices of the Federal Financial Institutions Examination
Council (FFIEC), have proposed the attached "Policy Statement on External Auditing Programs of Banks
and Savings Associations" and are seeking comment on its proposal. The proposal was developed jointly
by the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.
As discussed more fully in the attached Federal Register notice, the proposal encourages institutions not
subject to the audit requirement in Section 36 of the Federal Deposit Insurance Act to adopt an external
auditing program that involves an annual audit of its financial statements by an independent public
accountant. If an annual audit of the financial statements is not performed, the proposal suggests two
acceptable alternatives. The proposal also encourages institutions to form an audit committee, preferably
consisting of outside Directors.
Institutions supervised by the FDIC should be aware that this policy is intended to replace the FDIC's
currently outstanding "Statement of Policy Regarding Independent External Auditing Programs of State
Nonmember Banks," as amended on June 24, 1996, and the FDIC's recently rescinded "Statement of
Policy Providing Guidance on External Auditing Procedures for State Nonmember Banks."
Comments on the proposed policy statement are due to the FFIEC by April 20, 1998.
Joe M. Cleaver
Executive Secretary
Attachment:
Feb.17, 1998 Federal Register, pages 7796-7802.
Distribution: All State Banks (Commercial and Savings) and Insured Savings Associations
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public
Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 (800-276-6003 or (703)
562-2200).Inactive
550 17th Street NW, Washington, DC 20429 Division of Supervision
External Auditing Programs
FIL-16-98
February 18, 1998
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Proposed FFIEC Policy Statement on External Auditing Programs of Banks and Savings
Associations
The four federal banking agencies, under the auspices of the Federal Financial Institutions Examination
Council (FFIEC), have proposed the attached "Policy Statement on External Auditing Programs of Banks
and Savings Associations" and are seeking comment on its proposal. The proposal was developed jointly
by the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.
As discussed more fully in the attached Federal Register notice, the proposal encourages institutions not
subject to the audit requirement in Section 36 of the Federal Deposit Insurance Act to adopt an external
auditing program that involves an annual audit of its financial statements by an independent public
accountant. If an annual audit of the financial statements is not performed, the proposal suggests two
acceptable alternatives. The proposal also encourages institutions to form an audit committee, preferably
consisting of outside Directors.
Institutions supervised by the FDIC should be aware that this policy is intended to replace the FDIC's
currently outstanding "Statement of Policy Regarding Independent External Auditing Programs of State
Nonmember Banks," as amended on June 24, 1996, and the FDIC's recently rescinded "Statement of
Policy Providing Guidance on External Auditing Procedures for State Nonmember Banks."
Comments on the proposed policy statement are due to the FFIEC by April 20, 1998.
Joe M. Cleaver
Executive Secretary
Attachment:
Feb.17, 1998 Federal Register, pages 7796-7802.
Distribution: All State Banks (Commercial and Savings) and Insured Savings Associations
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public
Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 (800-276-6003 or (703)
562-2200).Inactive