FDIC CHAIRMAN DESCRIBES OPTIONS FOR STRONGER BANK ACCOUNTING
FOR FOR IMMEDIATE RELEASE PR-30-2002 (3-11-2002)
Media Contact: David Barr (202) 898-6992
Regulators should consider strengthening the ground rules governing bank auditing and accounting, according to Federal Deposit Insurance Corporation (FDIC) Chairman Don Powell. His remarks were given in a speech before a group of community bankers and are highlighted in today's edition of FYI. The speech outlined reforms that are being considered.
With respect to bank auditing, chairman Powell said that bank regulators should consider using their authority to: 1) ban accounting firms from providing internal auditing and other consulting services to the same financial institution they are auditing externally; 2) implement a nationwide document retention requirement for the records and working papers used during the audit of any insured depository institution; and 3) craft regulations enhancing the range of sanctions the regulators can impose on auditors. Chairman Powell also noted that existing accounting literature may have shortcomings with respect to certain aspects of bank securitization activity.
FYI is an e-mail bulletin covering FDIC analysis of emerging issues in banking and the economy. FYI is available on the FDIC Web site at www.fdic.gov, where those interested in receiving each issue electronically may subscribe. A copy of FYI is attached.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 9,747 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars - insured financial institutions fund its operations.
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