Federal Deposit Insurance Corporation
550 17th Street NW, Washington, DC 20429 Division of Supervision
External Auditing Programs
FIL-4-98
January 9 1998
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Rescission of Policy Statement Providing Guidance on External Auditing
Procedures for State Nonmember Banks
The FDIC Board of Directors has rescinded the agency's "Statement of Policy Providing
Guidance on External Auditing Procedures for State Nonmember Banks." The rescission took
effect on December 31, 1997. The policy and the reasons for its rescission are summarized in
the attached Federal Register notice.
Despite the policy statement rescission, a well-planned external auditing program should
continue to be an integral part of the safe and sound operations of each institution. Still in effect
is the FDIC's "Statement of Policy Regarding Independent External Auditing Programs of State
Nonmember Banks," as amended on June 24, 1996, in which the FDIC strongly encourages
each state nonmember bank to adopt an adequate external auditing program that includes an
annual audit of its financial statements. In addition, the audit requirements of Section 36 of the
Federal Deposit Insurance Act (FDI Act) and its implementing regulation, 12 CFR Part 363,
continue to apply to insured depository institutions with -500 million or more in total assets.
As discussed more fully in the attached Federal Register notice, the FDIC and other banking
agencies are preparing a proposed uniform interagency policy statement on external auditing
programs for banks and thrifts. The proposed policy statement is expected to offer two
acceptable alternatives to a financial statement audit for institutions not subject to the audit
requirement in Section 36 of the FDI Act. The proposal should be issued for public comment
later this year.
Please share this information with the appropriate personnel in your institution. For further
information, please contact Doris L. Marsh, Examination Specialist in the Division of
Supervision, at (202) 898-8905.
Nicholas J. Ketcha Jr.
Director
Attachment:
Jan. 7 Fed. Register, pages 878-879 (see the FDIC web site, /banknews, for electronic version).
Distribution: FDIC-Supervised Banks (Commercial and Savings)
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-4-98
January 9 1998
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Rescission of Policy Statement Providing Guidance on External Auditing
Procedures for State Nonmember Banks
The FDIC Board of Directors has rescinded the agency's "Statement of Policy Providing
Guidance on External Auditing Procedures for State Nonmember Banks." The rescission took
effect on December 31, 1997. The policy and the reasons for its rescission are summarized in
the attached Federal Register notice.
Despite the policy statement rescission, a well-planned external auditing program should
continue to be an integral part of the safe and sound operations of each institution. Still in effect
is the FDIC's "Statement of Policy Regarding Independent External Auditing Programs of State
Nonmember Banks," as amended on June 24, 1996, in which the FDIC strongly encourages
each state nonmember bank to adopt an adequate external auditing program that includes an
annual audit of its financial statements. In addition, the audit requirements of Section 36 of the
Federal Deposit Insurance Act (FDI Act) and its implementing regulation, 12 CFR Part 363,
continue to apply to insured depository institutions with -500 million or more in total assets.
As discussed more fully in the attached Federal Register notice, the FDIC and other banking
agencies are preparing a proposed uniform interagency policy statement on external auditing
programs for banks and thrifts. The proposed policy statement is expected to offer two
acceptable alternatives to a financial statement audit for institutions not subject to the audit
requirement in Section 36 of the FDI Act. The proposal should be issued for public comment
later this year.
Please share this information with the appropriate personnel in your institution. For further
information, please contact Doris L. Marsh, Examination Specialist in the Division of
Supervision, at (202) 898-8905.
Nicholas J. Ketcha Jr.
Director
Attachment:
Jan. 7 Fed. Register, pages 878-879 (see the FDIC web site, /banknews, for electronic version).
Distribution: FDIC-Supervised Banks (Commercial and Savings)
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