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FDIC Federal Register Citations From: Russ Lam I have received and reviewed Financial Institution Letter 72-2005, Annual Independent Audits and Reporting Requirements Proposed Amendment to Part 363, and would like to offer comments thereon for your consideration. I support the proposed changes. For the affected institutions, this will provide significant and needed relief from the cost and personnel requirements presented by management evaluation and audits/examinations of internal control over financial reporting, particularly considering the critical shortage of personnel across the nation largely due to the requirements of the Sarbanes-Oxley Act of 2002, with little impact on institutional safety and soundness or the reliability of their audited financial statements. I believe the expected changes to the AT501 rules (to close the gap between application of these rules and the PCAOBs Audit Standard No. 2) are warranted to eliminate a double-standard, however, they would exacerbate the cost and personnel problems for all parties involved. My recommendation is in regard to the timing of approval and its implications. I noted that comments are due by September 16, 2005, therefore final resolution can not be expected until sometime after that date. For institutions with assets between $500 million and $1 billion at January 1, 2005, this change has significant implications for management and external auditor responsibilities in relation to 2005 annual reporting. The pending status of these rule changes for the current period effectively places significant aspects of planning, including timing and nature of procedures and resource requirements, on-hold for these institutions. Many of the responsibilities and performance of procedures related to internal control over financial reporting are addressed prior to year end (especially in the fourth quarter). Therefore, I urge approval of these rule changes as soon as administratively feasible. The closer we get to the fourth quarter without final resolution, the greater the impact and implications. I appreciate your consideration of these comments. Russ Lam, CPA
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Last Updated 08/03/2005 | Regs@fdic.gov |