Skip to main content
U.S. flag
An official website of the United States government
Dot gov
The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.
The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.
This page is no longer active. Its content has expired or been rescinded by the FDIC.
Financial Institution Letter

TO: CHIEF EXECUTIVE OFFICER (also of interest to Chief Financial Officer)
SUBJECT: Proposed Rules of Practice for the Removal, Suspension, and Debarment of Accountants and Accounting Firms
Summary: The agencies are soliciting public comment on a proposal 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 Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Office of Thrift Supervision (the agencies) have jointly issued the attached proposed rules that would establish procedures under which the agencies could remove, suspend or bar an accountant or firm from performing audit and attestation services for insured depository institutions subject to the annual audit and reporting requirements of Section 36 of the Federal Deposit Insurance Act. Section 36 applies to institutions with $500 million or more in total assets. Comments on the proposal are due by March 10, 2003.

Under the proposed rules, violations of law, certain negligent conduct, reckless violations of professional standards, and lack of qualifications to perform auditing services would be considered good cause to remove, suspend or bar an accountant or firm from providing audit and attestation services for institutions subject to Section 36. In addition, an accountant or accounting firm would not be permitted to perform these services if the accountant or firm has been removed, suspended or debarred by one of the agencies, or if the Public Company Accounting Oversight Board, the Securities and Exchange Commission, or a state licensing authority takes certain disciplinary actions against the accountant or firm. The proposal also provides for immediate suspensions of accountants in limited circumstances.

For further information, please contact Richard A. Bogue, Counsel (202-898-3726), in the Legal Division, or Robert F. Storch, Chief Accountant (202-898-8906), in the Division of Supervision and Consumer Protection.

For your reference, FDIC Financial Institution Letters may be accessed on the FDIC's Web site at . To learn how to automatically receive FDIC Financial Institution Letters through e-mail, please visit .

Michael J. Zamorski

Attachment: January 8, 2003, Federal Register, pages 1116-1130
HTML | PDF (154.3KB File - PDF Help or Hard Copy )

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, NW, Room 100, Washington, DC 20434 (1-877-275-3342, option 5, or (703) 562-2200).

Last Updated 4/12/2004

Last Updated: January 8, 2003